ORSA: Moving Beyond the Compliance Checkbox

The Own Risk and Solvency Assessment is one of the most important risk management tools available to an insurer. It is also, in many organisations, one of the least useful things produced all year — not because the concept is flawed, but because somewhere between the regulatory requirement and the actual document, it becomes a compliance exercise rather than a genuine management tool.

Treat the process as more important than the document

The ORSA is often thought of as a report. It should be thought of as a process. The real value is not in the document that gets submitted — it is in the conversations and analysis that happen along the way. Is senior management genuinely engaging with the organisation's risk profile? Is the board stress testing its assumptions about capital adequacy?

Make the stress tests genuinely stressful

One of the most common weaknesses in ORSA production is scenario testing that is not actually challenging. Organisations naturally gravitate towards scenarios that look credible but do not raise uncomfortable questions. Good scenario design starts from a different place: ask what would genuinely threaten this business, then build those scenarios in, even if they are uncomfortable.

Connect it to real capital and strategic decisions

The ORSA's most important function is to support decision-making about capital adequacy and strategic direction. It should be answering questions like: do we have enough capital to pursue our growth strategy under adverse scenarios? When the ORSA is genuinely connected to these questions, it becomes something the CFO and CEO want to engage with, not just sign off on.

Engage the board properly

The ORSA should not arrive on the board's desk as a finished document for sign-off. Ideally, the board is engaged throughout the process — reviewing scenarios, challenging assumptions, providing direction on risk appetite boundaries. When the board is involved in the process, the final document reflects genuine governance rather than a reporting formality.

A good ORSA, produced through a genuinely rigorous process, is one of the most valuable things an insurer can invest time in. The compliance submission is just the by-product.