Developing Scenarios for the Insurance Industry

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Scenarios are increasingly used by practitioners, decision makers, and other stakeholders in wider insurance applications to better understand the characteristics and consequences of unknown, uncertain, or unexpected future events, and support planning and decision-making strategies to address them.

The report outlines best practices for scenario analysis within the insurance community, and provides a practical framework to assist practitioners engaging with risk scenario development. By providing key criteria and considerations for scenarios in the form of a scenario development framework, we hope to equip the reader with the necessary tools and context to develop coherent, comprehensive, and intelligible scenarios, which therefore effectively fulfil their intended purpose.