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"Now, more than ever, insurers need to rely on strong risk management capabilities in order to deal with the different challenges posed by the economic slowdown, the financial market volatility, the stress on sovereign debt, the demographic changes and the evolving pattern of natural catastrophes", he said.
Furthermore, risk management should not be seen as "a point in time procedure" but as "a continuous process that should be used in the implementation of the undertaking's overall strategy".
Explaining the expectation of supervisory bodies, the EIOPA head commented: "The insurance undertaking's risk-management system must be comprehensive, covering at least areas like underwriting and reserving, asset liability management, investment, liquidity and concentrations, operational risk and reinsurance and other risk-mitigation techniques".
"Consequently, supervisors expect that suitable processes and procedures will be in place to ensure the reliability, sufficiency and adequacy of the statistical and accounting data to be considered in the underwriting and reserving processes.
Bernardino also addressed the role of the loss adjusting profession. "Your role is particularly sensitive in the relationship between insurers and their clients and claimants. You have a particularly relevant role when dealing with major catastrophes", he said.
While Bernardino commended the European loss adjusting federation, FUEDI, for demanding high standards of professional conduct and competence, he believes that self-regulation alone is not enough and that some basic principles on loss adjusting should be incorporated into the EU regulatory framework.