Different Solvency II interpretations across Europe lead to varied methodologies. Most UK insurers explicitly allow for ENID following regulator guidance, while other countries have differing regulations and approaches. This article reviews global treatments of ENID and related regulatory requirements.
Before Solvency II, CEIOPS hinted at the need to account for ENID. In their 2009 paper1 they advised: ‘Regardless of whether a deterministic or simulation model is used, the resulting mean estimates will therefore be based on development similar to that seen in the history and not contain ‘all possible future outcomes’. […] Regardless of the technique, judgement is required in making additions or adjustments to the estimates to allow for circumstances not included in the history that need to be incorporated into best estimates.’
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- Global treatment of ENID for non-life insurers .pdf • 0,09 MB