Holistic Analysis of Insurer's Future Financial Condition

B

The correct answer is B. Dynamic solvency testing (DST).

Dynamic solvency testing (DST) is a process that involves analyzing an insurer's future financial condition under multiple scenarios. The scenarios are based on different factors that could impact the insurer's financial condition, such as changes in interest rates, investment performance, and underwriting results.

The analysis involves projecting the insurer's financial position over a specified time horizon, typically five to ten years, under each scenario. This allows the insurer to identify potential risks and vulnerabilities in its financial condition and develop strategies to mitigate them.

DST is a holistic approach to assessing an insurer's financial strength and stability. It considers all significant factors that could impact an insurer's financial condition and provides a comprehensive analysis of the insurer's future financial position. By conducting DST, insurers can proactively manage their risks and ensure that they have adequate capital to meet their obligations to policyholders.

Insurance resting (IT) is not a recognized term in the insurance industry. Financial testing (AT) and adequacy testing (AT) are terms that are sometimes used in the context of financial analysis, but they are not specific to the insurance industry.