Solvency II-ish
Did you hear it? The deafening boom of Solvency II being implemented on January 1 2016.
Given the near 15-year-long build up and the various aborted implementation dates – not to mention the billions spent on compliance – the fact that Europe’s re/insurance industry finally got over the Solvency II line should have resulted in jubilant hysteria.
Nope, I didn’t hear it either.
Perhaps that’s because much of the hard work now starts. It seems January 1 2016 wasn’t the end we had all wished for but the start of a long process towards full compliance for Europe’s 4,500 or so insurance firms. The end of the beginning, as Churchill said.
Where the European market is in terms of compliance is not clear. Certainly the latter half of 2015 saw lots of activity: in a recent letter, the UK’s Prudential Regulatory Authority noted the “simultaneous approval of 19 internal models for use by insurance firms under Solvency II from 1 January 2016” across the latter half of 2015.
A survey by Insurance Europe, the European insurance and reinsurance federation, published on December 15, concluded that the “vast majority” of insurers are ready for Solvency II, despite ‘gold plating’ almost tripling. 79% of respondents said that governance had improved due to Solvency II, while 74% reported that risk monitoring and identification processes had been enhanced and 63% felt that data quality had increased.
Flexibility has long been part of the Solvency II narrative – take the so called grandfathering rules, for instance.
But it will be very interesting to see what now happens across 2016 and where the industry is, say, by January 2017, a year on, and what follow-up surveys and indicators are conducted by the European Insurance and Occupational Pensions Authority (EIOPA) and other key stakeholders.
Compliance, Financial services, Insurance, Insurance PR, Solvency