International ERM Glossary

The International ERM Glossary is intended to provide users with a set of definitions that are in common usage around the world by actuaries, regulators and members of the insurance industry. The purpose in developing the glossary is to help provide a common understanding of the terms currently in use, as definitions and meanings have varied over time, and among practitioners. It can also be used as a training and educational tool for regulators.

The glossary can be consulted per letter, organization or grouping.

DISCLAIMER: The content of the International ERM Glossary has been compiled by the Joint ORSA Subcommittee of the Insurance Regulation Committee and the Enterprise and Financial Risk Committee of the IAA. This information has been collated and presented for educational and informational purposes to the members of the IAA and interested parties. The IAA assumes no responsibility for the accuracy, completeness, currency, reliability of the information in the International ERM Glossary or access to any information contained on any of the sources cited in the Glossary. The IAA, its employees and officers shall not be liable for any loss or damage, direct or indirect, which may arise or occur as a result of the use of or reliance upon any of the material in the International ERM Glossary.


TermGroupingOrganization or Jurisdiction Defining TermSource of DefinitionDefinition
Probability of RuinMethodsInternational Risk Management InstituteIRMI TermsThe percentile of the probability distribution corresponding to the point at which capital is exhausted. Typically, a minimum acceptable probability of ruin is specified, and economic capital is derived therefrom.P
Probability of RuinMethodsThe European Economic AreaCEA Solvency IIRisk measure. The likelihood that total net cash outflows exceed at any time the available resources starting with a given amount of resources, within a specified time horizon.P
Probability of RuinMethodsThe European Economic AreaSolvency II'Risk measure' means a mathematical function which assigns a monetary amount to a given probability distribution forecast and increases monotonically with the level of risk exposure underlying that probability distribution forecast.(Solvency II Directive art. 13(39))P
Probability of RuinMethodsUnited StatesNAIC ORSA MANUALLikelihood of liabilities exceeding assets for a given time horizon.P