| Available Capital | Solvency terms | United States | NAIC ORSA MANUAL | The amount of resources that an enterprise has at a given point in time under a defined valuation or accounting basis (e.g., economic, statutory, GAAP, or a combination) to support its business and under the defined valuation represents the insurers assessment of the types of capital required to support its business. | A |
| Conditional Tail Expectation or Tail VaR (Tail Value at Risk) | Methods | United States | NAIC ORSA MANUAL | A measure of the amount of risk that exists in the tail of a distribution of outcomes, expressed as the probability weighted average of the outcomes beyond a chosen point in the distribution. | C |
| Correlation Matrix | Methods | United States | NAIC ORSA MANUAL | A symmetric matrix specifying pairwise interactions between a set of variables or data. A correlation matrix is commonly applied to risks or capital amounts and is an important determinant of calculated risk capital, including levels of diversification. | C |
| Credit Risk (Counterparty Risk) | Risk Categories | United States | U.S. ASB Terms | Risk associated with the possibility of a loss on an investment arising from a borrower who does not make payments as promised. | C |
| Deficit Capital | Solvency terms | United States | NAIC ORSA MANUAL | If the amount of available capital is less than the determined risk capital of an enterprise, then the enterprise is said to have deficit capital. | D |
| Defined Security Margin | Solvency terms | United States | NAIC ORSA MANUAL | Minimum threshold of available capital that a company wishes to achieve or maintain, consistent with the company's business strategy, risk appetite and risk tolerance. | D |
| Dependency Structure | Methods | United States | NAIC ORSA MANUAL | Specification of the relationship between different variables. Commonly specified in a correlation matrix. | D |
| Double Gearing | Solvency terms | United States | NAIC ORSA MANUAL | Used to describe situations where multiple companies (typically parent and subsidiary) are using shared capital to buffer against risk occurring in separate entities. | D |
| Economic Capital | Solvency terms | United States | U.S. ASB Terms | The amount of capital an organization requires to survive or to meet a business objective for a specified period of time and risk metric, given its risk profile. | E |
| Enterprise Risk Management | General | United States | U.S. ASB Terms | The discipline by which an organization in any industry assesses, controls, exploits, finances, and monitors risks from all sources for the purpose of increasing the organization's short- and long-term value to its stakeholders. | E |
| Fungibility | Solvency terms | United States | NAIC ORSA MANUAL | Within a group context, the ability to redeploy available capital from one entity to another. Fungibility is reduced where the movement of available capital within the group is constrained or regulation prohibits it. | F |
| Group Capital | Solvency terms | United States | NAIC ORSA MANUAL | Group capital represents the aggregate available capital or risk capital for the entire group. It will be impacted by the interaction of the risks and capital of the individual entities within the group, with properties such as diversification, fungibility and the quality and form of capital being important drivers. | G |
| Insurance Risk (see Underwriting Risk) | Risk Categories | United States | U.S. ASB Terms | The extent to which the level or timing of actual insurance cash flows is likely to differ from expected insurance cash flows. | I |
| Own Risk and Solvency Assessment (ORSA) | General | United States | NAIC ORSA MANUAL | A component of an insurer's enterprise risk management (ERM) framework, is a confidential internal assessment appropriate to the nature, scale and complexity of an insurer conducted by that insurer of the material and relevant risks identified by the insurer assuciated with an insurer's current business plan and the sufficiency of capital resources to support those risks. | O |
| Probability of Ruin | Methods | United States | NAIC ORSA MANUAL | Likelihood of liabilities exceeding assets for a given time horizon. | P |
| Risk | Risk Categories | United States | U.S. ASB Terms | The potential of future losses or shortfalls from expectations due to deviation of actual results from expected results. | R |
| Risk Appetite | General | United States | NAIC ORSA MANUAL | Documents the overall principles that a company follows with respect to risk-taking, given its business strategy, financial soundness objectives and capital resources. Often stated in qualitative terms, a risk appetite defines how an organization weighs strategic decisions and communicates its strategy to key stakeholders with respect to risk-taking. It is designed to enhance management's ability to make informed and effective business decisions while keeping risk exposures within acceptable boundaries. | R |
| Risk Appetite | General | United States | U.S. ASB Terms | The level of aggregate risk that an organization chooses to take in pursuit of its objectives. | R |
| Risk Capital | Solvency terms | United States | NAIC ORSA MANUAL | An amount of capital calculated to be sufficient to withstand adverse outcomes associated with various risks of an enterprise, up to a pre-defined security standard. | R |
| Risk Exposure | General | United States | NAIC ORSA MANUAL | For each risk listed in the company's risk profile, the amount the company stands to lose due to that particular risk at a particular time, as indicated by a chosen metric. | R |
| Risk Limit | General | United States | NAIC ORSA MANUAL | Typically quantitative boundaries that control the amount of risk that a company takes. Risk limits are typically more granular than risk tolerances and may be expressed at various levels of aggregation: by type of risk, category within a type of risk, product or line of business, or some other level of aggregation. Risk limits should be consistent with the company's overall risk tolerance. | R |
| Risk Limit | General | United States | U.S. ASB Terms | A threshold used to monitor the actual risk expousre of a specific unit or units of the organization to ensure that the level of aggregate risk remains within the risk tolerance. | R |
| Risk Profile | General | United States | NAIC ORSA MANUAL | A delineation and description of the material risks to which an organization is exposed. | R |
| Risk Tolerance | General | United States | NAIC ORSA MANUAL | The company's qualitative and quantitative boundaries around risk-taking, consistent with its risk appetite. Qualitative risk tolerances are useful to describe the company's preference for, or aversion to, particular types of risk, particularly for those risks that are difficult to measure. Quantitative risk tolerances are useful to set numerical limits for the amount of risk that a company is willing to take. | R |
| Risk Tolerance | General | United States | U.S. ASB Terms | The aggregate risk-taking capacity of an organization. | R |
| Scenario Analysis | Methods | United States | NAIC ORSA MANUAL | Analysis of the impact of possible future outcomes, based on alternative projected assumptions. This can include changes to a single assumption or combination of assumptions. | S |
| Scenario Analysis | Methods | United States | U.S. ASB Terms | (Scenario Test) A process for assessing the impact of one possible event or seveal simultaneously or sequentially occuring possible events on an organization's financial position. | S |
| Solvency | Solvency terms | United States | NAIC ORSA MANUAL | For a given accounting basis, the state where, and extent to which, assets exceed liabilities. | S |
| Stochastic Analysis | Methods | United States | NAIC ORSA MANUAL | A methodology designed to attribute a probability distribution to a range of possible assumptions. This can include changes to a single assumption or combination of assumptions. | S |
| Stress Test | Methods | United States | NAIC ORSA MANUAL | A type of scenario analysis in which the change in parameters is considered significantly adverse or even extreme. | S |
| Stress Test | Methods | United States | U.S. ASB Terms | A process for measuring the impact of adverse changes in one or relatively few factors affecting an organization's financial position. | S |
| Time Horizon | Methods | United States | NAIC ORSA MANUAL | In the context of risk capital calculations, the period over which the impact of changes to risks is tested. | T |
| Value-at-Risk (see also TailVaR) | Methods | United States | NAIC ORSA MANUAL | An estimate of the maximum loss over a certain period of time at a given confidence level. | V |