| Available Capital | Solvency terms | IAIS | IAIS Supervisory Material | (Capital) The financial resources of an insurer and different variation/calculations of capital may be referred to as equity capital (i.e. paid-up, share, subscribed), economic capital and regulatory capital. | A |
| Conditional Tail Expectation or Tail VaR (Tail Value at Risk) | Methods | IAIS | IAIS Supervisory Material | Value at Risk (VaR) plus the average excess over the VaR if such excess occurs over a specified amount of time. | C |
| Credit Risk (Counterparty Risk) | Risk Categories | IAIS | IAIS Supervisory Material | The risk of financial loss resulting from default or movements in the credit rating assignment of issuers of securities (in the insurers investment portfolio), debtors (e.g. mortgagors), or counterparties (e.g. on reinsurance contracts, derivative contracts or deposits) and intermediaries, to whom the company has an exposure. Credit risk includes default risk, downgrade or migration risk, indirect credit or spread risk, concentration risk and correlation risk. Sources of credit risk include investment counterparties, policyholders (through outstanding premiums),reinsurers, intermediaries and derivative counterparties. | C |
| Double Gearing | Solvency terms | IAIS | IAIS Supervisory Material | Used to describe a situation where the same capital is used simultaneously as a buffer against risk in two or more legal entities of a conglomerate. | D |
| Economic Capital | Solvency terms | IAIS | IAIS Supervisory Material | The capital needed by the insurer to satisfy its risk tolerance and support its business plans and which is determined from an economic assessment of the insurer's risks, the relationship of these risks and the risk mitigation in place. | E |
| Enterprise Risk Management | General | IAIS | IAIS ICP 16 | The process of identifying, assessing, measuring, monitoring, controlling and mitigating risks. | E |
| Enterprise Risk Management | General | IAIS | IAIS Supervisory Material | The process and activities of identifying, assessing, measuring, monitoring, controlling and mitigating risks in respect of the insurer's enterprise as a whole. | E |
| Insurance Risk (see Underwriting Risk) | Risk Categories | IAIS | IAIS Supervisory Material | (Insurance Risk, Technical Risks) Represent the various kinds of risk that are directly or indirectly associated with the technical or actuarial bases of calculation for premiums and technical provisions in both life and non-life insurance, as well as risks associated with operating expenses and excessive or uncoordinated growth. Technical risks result directly from the type of insurance business transacted. They differ depending on the class of insurance. Technical risks exist partly due to factors outside the company's area of business activities, and the company often may have little influence over these factors. The effect of such risks - if they materialise - is that the company may no longer be able to fully meet the guaranteed obligations using the funds established for this purpose, because either the claims frequency, the claims amounts, or the expenses for administration and settlement are higher than expected. (Underwriting Risk) Includes claims, expense and reserving risks and the risks associated with guarantees and options embedded in policies. | I |
| Liquidity Risk | Risk Categories | IAIS | IAIS Supervisory Material | The risk that an insurer is unable to realise its investments and other assets in a timely manner in order to settle its financial obligations as they fall due. | L |
| Market Risk | Risk Categories | IAIS | IAIS Supervisory Material | The risk to an insurer's financial condition arising from movements in the level or volatility of market prices of assets, liabilities and financial instruments, whether on all investments as a whole (general market risk) or on an individual investment (specific market risk). | M |
| Minimum Capital Requirement | Solvency terms | IAIS | IAIS Supervisory Material | In the context of a legal entity's capital adequacy assessment, the level of solvency at which, if breached, the supervisor would invoke its strongest actions, in the absence of appropriate corrective action by the insurer. | M |
| Operational Risk | Risk Categories | IAIS | IAIS Supervisory Material | The risk arising from the inadequacy or failure of internal systems, personnel, procedures or controls leading to financial loss. Operational risk also includes custody risk. | O |
| Own Risk and Solvency Assessment (ORSA) | General | IAIS | IAIS ICP 16 | The assessment of whether an insurer's risk management and solvency position is currently adequate and is likely to remain so in the future. | O |
| Reverse Stress Testing | Methods | IAIS | IAIS ICP 16 | Reverse stress testing identifies scenarios that are most likely to cause an insurer to fail. Such an approach may help to ensure adequate focus on the management actions that are appropriate to avoid undue risk of business failure. The focus of such reverse stress testing may be largely qualitative in nature although broad assessment of associated financial impacts may help in deciding the appropriate action to take. | R |
| Risk Appetite | General | IAIS | IAIS Supervisory Material | The aggregate level and types of risk an insurer is willing to assume within its risk capacity to achieve its strategic objectives and business plan. | R |
| Risk Limit | General | IAIS | IAIS Supervisory Material | The level of risk to which the insurer is prepared to be exposed. The risk measure might be a supervisory one or an internal one or a combination of both. | R |
| Risk Tolerance | General | IAIS | IAIS Supervisory Material | Used to include the active retention of risk that is appropriate for an insurer in the context of its strategy, financial strength, and the nature, scale and complexity of its business and risks. Risk tolerance is typically a percentage of the absolute risk bearing capacity for an insurer. | R |
| Scenario Analysis | Methods | IAIS | IAIS Supervisory Material | A complicated type of test, which contains simultaneous moves in a number of risk factors and is often linked to explicit changes in the view of the world. | S |
| Solvency | Solvency terms | IAIS | IAIS Supervisory Material | Ability of an insurer to meet its obligations to policyholders when they fall due. Solvency includes capital adequacy but also involves other aspects of a solvency regime, for example, technical provisions, qualitative aspects (such as would be addressed in an enterprise risk management framework), supervisory review and supervisory reporting. | S |
| Stochastic Analysis | Methods | IAIS | IAIS Supervisory Material | A methodology which aims at attributing a probability distribution to financial variables of interest. It sometimes uses closed form solutions, often involves simulating large numbers of scenarios in order to reflect the distributions of the capital required by, and the different risk exposures of, the insurer. | S |
| Stress Test | Methods | IAIS | IAIS ICP 16 | The method of measuring the financial impact of stressing one or relatively few factors affecting the insurer. | S |
| Stress Test | Methods | IAIS | IAIS Supervisory Material | The method of solvency assessment that provides for the consideration of the impact (current and prospective) of a particular defined set of alternative assumptions or outcomes that are adverse. Consideration is given to the effect on the insurance company assets, liabilities and operations of a defined adverse scenario. | S |
| Underwriting Risk | Risk Categories | IAIS | IAIS ICP 16 | in a broad sense and includes claims, expense and reserving risks and the risks associated with guarantees and options embedded in policies | U |
| Underwriting Risk | Risk Categories | IAIS | IAIS Supervisory Material | Includes claims, expense and reserving risks and the risks associated with guarantees and options embedded in policies. | U |
| Value-at-Risk (see also TailVaR) | Methods | IAIS | IAIS Supervisory Material | An estimate of the worst expected loss over a certain period of time at a given confidence level. | V |