Liquidity premium, matching premium, symmetric adjusters, extrapolation methods and a number of other technical concepts have turned the fairly simple concept of a discount rate into a minefield under Solvency II. With uncertainty surrounding so many areas of Solvency II, it is so important for insurance companies to understand the impacts of the various twists and turns that the road to Solvency II implementation could take.
This short paper simplifies the issues around the discount rate into one, easily digestible paper to explain the issues, why they’re important and their impacts.
KPMG has much experience in advising clients on the various complex topics within Solvency II and continue to work with a huge variety of large and small insurance companies to ensure that the solutions are sensible, practicable and proportionate to the company.
