As a provider of catastrophe modeling software and services, AIR is committed to helping our clients address the requirements of Solvency II.

This page acts as a central repository for Solvency II related materials, developed in whole or in part by AIR. The materials posted here are designed to assist clients-and ultimately regulators-in understanding not just the AIR models and software, but also the critical aspects of our business that will help to ensure the risks facing our clients are well understood.


AIR Solvency II Reference Guide

This document, is designed to help our clients navigate the AIR website to locate already existing information and documentation that will assist them in addressing requirements relating to Solvency II.


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Interim Guidance on Solvency II Compliance: Model Assumptions and Limitations

This document consolidates information on general assumptions that apply across models and on specific key assumptions incorporated in the hurricane, earthquake, severe thunderstorm, and winter storm models for the United States, as well as the European extratropical cyclone model and Japan typhoon and earthquake models. Also discussed are some of the areas for which new research and the availability of new data may result in changes to modeled losses in the future.


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Industry Good Practice for Catastrophe Modelling under Solvency II

This collaborative effort, published in December 2011, was coordinated by the FSA and Association of British Insurers (ABI),and the authors include representatives from insurers, reinsurers,reinsurance brokers and commercial catastrophe model vendors-including AIR. The document is divided into three sections:General Principles, Operational Principles and Technical Principles. Covered topics range from documentation requirements under Solvency II, formal policies regarding outsourcing to third-party service providers, management of catastrophe model data, and understanding the options and settings used to obtain analysis results. AIR encourages anyone involved in catastrophe modeling―and specifically those involved in catastrophe risk management―to download (from the ABI website) this valuable addition to the growing library of documents pertaining to Solvency II compliance.


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Non Modelled Risks: A Guide to More Complete Catastrophe Risk Assessment for Re (Insurers)

This follow up to the Industry Good Practice guide was also coordinated by the PRA (Prudential Regulatory Authority) and the Association of British Insures (ABI) and the authors include representatives from insurers, reinsurers, reinsurance brokers and commercial catastrophe model vendors-including AIR. The goal of the document, published in April 2014, is to provide 'industry good practice' for understanding non-modelled catastrophe risks. The document covers topics such as governance, identifying non-modeled risk, developing framework for quantification, extending catastrophe model use, and incorporating non-modeled risk in the capital model. For a full copy of the guide, visit the ABI website and download this addition to the growing library of documents pertaining to Solvency II compliance.


Download the Guide

Use of AIR Documentation in Company Model Validation Documents

AIR invests substantial resources in the development of its models,modeling methodologies and databases. Many of the documents referenced in AIR's Solvency II resource documents contain proprietary and confidential information, which is intended for the use of AIR clients who are subject to the restrictions of the confidentiality provisions set forth in license and other nondisclosure agreements. These documents can be clearly distinguished by confidentiality statements within the documents themselves.

However, AIR understands that for the purposes of meeting model validation requirements under Solvency II, our clients may find it useful to leverage excerpts and exhibits from AIR technical documents to use in their own model validation documentation. Such usage is permitted as long as the information is appropriately referenced, including the title of the AIR document and the numbers of any figures or tables used. It is also understood that, if such excerpts are used, the client's model validation documents will be circulated only within the company itself and to the regulator,thus maintaining the confidentiality of AIR documentation in line with existing licensing agreements.

Access to AIR Documentation by Companies Who Do Not Directly License AIR Software

AIR is aware that many entities that are not clients of AIR but currently receive AIR model output through third parties (mainly brokers) may need access to AIR documentation for the purposes of meeting model validation requirements under various regulatory regimes, including Solvency II. In such cases AIR's policy is to invite those entities to contact AIR directly. AIR will then work with them to understand the exact documentation requirements and,where appropriate, release them under a non-disclosure agreement.

Disclosure of AIR Documentation to Regulators

AIR documentation may also be directly shared with regulatory bodies in the context of Solvency II if those regulatory bodies have entered into a binding nondisclosure agreement with AIR Worldwide. AIR clients who wish to instigate a discussion between AIR and a regulatory body or bodies with respect to a nondisclosure agreement should contact their AIR representative. To date, the following organizations have nondisclosure agreements with AIR: 

  • Lloyd's
  • Prudential Regulation Authority
  • Central Bank of Ireland (CBI)
  • Swiss Financial Market Supervisory Authority (FINMA)
  • German Federal Financial Supervisory Authority (BaFin)

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