Insurers plan to boost capital buffer

by David Masters

Story link: Insurers plan to boost capital buffer

Over half of insurance firms worldwide plan to increase their capital buffer over the next 12 months, according to a new study published this week.

Research by the Economist Intelligence Unit on behalf of KPMG found that 56% of insurers plan to bolster capital reserves in the next year

Insurers confessed their need for extra capital despite 85% of firms polled saying they were well capitalised.

The majority of those surveyed thought the insurance industry as a whole had sufficient capital reserves.

KPMG said insurance executives refused to explain this ‘apparent contradiction’ between plans to boost reserves and the assertion of being well-capitalised.

Analysts said insurers may be preparing for anticipated regulatory reform that will demand a larger capital cushion.

The Economist Intelligence Unit polled 315 insurance executives from around the world, with roughly one third from Asia, one third from the US, and one third from Europe.

Around half of the insurers polled were non-life, while 9% were re-insurers.