Risk Measurement Clause Samples

Risk Measurement. Baloise Group’s risk model standardises the process of quantifying business and financial market risks across all strategic business units. It is consistent with the principles and calculation methods applied by the Swiss Solvency Test. For all affiliates which are subject to the Solvency II regime the local risk model is consistent with the principles and calculation methods applied by the European Union’s Solvency II directives. The risk model provides the foundation on which management can make strategic and operational decisions. Risk measurement metrics are used to calculate a target capital figure – irrespective of any financial accounting treatment – with the ultimate objective of ensuring that Baloise Group remains solvent even in adverse circumstances and can meet its obligations to policyholders at all times. Baloise Group constantly compares this target capital figure with the capital currently available. In addition to the risk model Baloise Group uses the risk map set out above to identify, describe and evaluate specific risks in terms of their likely impact on its operating profit or loss. The corporate database of specific risks – which contains a detailed description of the risks concerned, their classification on the risk map, and early-warning indicators – is generated from this standardised process. Baloise Group supplements this description by the risks’ probable financial impact on Baloise Group’s balance sheet. Each risk is documented together with the measures needed to mitigate it.

Risk Measurement. 13 A. Statutory Authority and Compliance. ............................................................. 14 B. Quantitative and Other Limitations. ............................................................... 14 C. Documentation in Connection with Derivative Transactions. ........................ 17