Solvency II to affect insurers’ capital requirements
by Richard Kilner
New European Solvency II rules will mean European insurers losing an average of two-thirds of their current surplus capital, according to a new study by Morgan Stanley and Oliver Wyman.
Jeremy Irving, partner at international law firm Eversheds, has stated that the introduction of the new regulations will necessitate a cultural and operational shift for many insurers.
However, Irving went on to say that insurers who had been proactive and intelligent would be able to reap rewards from using the necessary processes in preparing for Solvency II to enhance their situation regarding operational activities, marketplace and customers.
He added that recent events have shown insurers to be less at risk from a dramatic crisis, such as the recent financial crisis, and ought to press this claim in a bid to affect changes in regulation.
In May of this year, a report by the Economist Intelligence Unit revealed that 36% of UK insurers did not believe the insurance industry generally would be ready for Solvency II in time for the 2012 deadline.