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Insurance: Just Part of the Financial Sector? [20]

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Bullet points include: Overarching concepts are similar: Primary role of capital viewed as there to absorb unexpected losses. Both include concept of capital tiering (although different in structure) reflecting effectiveness of different types of capital in different situations. But how reliable is valuation of remainder of balance sheet in stressed circumstances? Some differences seem justifiable based on different business models. Others less easy to justify. E.g. Tier 3, treatment of dated instruments, bail-in proposals, coupon cancellation and trigger levels more generally, regulatory capital adjustments (including those at group level). Treatment of expected future profits

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