European Solvency II survey 2014
Overall, the insurance industry is on track to implement Solvency II by 1 January 2016. However, a significant amount of work is needed between now and then to address preparedness across all three pillars.
Across Europe, insurers are coming to terms with the long-awaited implementation timeline for Solvency II (SII). While many report solid progress in their preparations (especially relative to the quantitative aspects of Pillar 1), there remains a significant amount of work to meet the deadline of 1 January 2016. There is also a great deal of variance in levels of preparedness across nations.
These are the headlines from our 2014 European Solvency II survey (conducted in the fall of 2013), which asked more than 170 carriers in 20 countries across Europe about their SII preparations. Following up from our 2012 European Solvency II survey, the 2014 survey was conducted in the fall of 2013.
Key findings from the report:
- Nearly 80% of European insurers expect to fully meet all requirements before the new January 2016 deadline; however, considerable variability in the level of preparedness exists by country.
- Insurers in the Netherlands, the UK and Nordic countries are most confident in meeting the requirements, while French, German, Greek and Eastern European insurers are less optimistic.
- A majority of European insurers reveal a high state of readiness to implement all components of a Pillar 1 balance sheet and fulfill most Pillar 2 requirements. Pillar 3 still presents a major challenge.
- Challenges of reporting and ensuring robust data and information technology (IT) remain very significant, and many companies have yet to sufficiently energize this part of their plans.
- Achieving internal model approval remains a major challenge despite a continuing commitment from leading companies.
- There is a strong, consistent message that insurers are seeking to improve the effectiveness of their risk management, including many dimensions in culture, appetite, controls, people and systems.
- Insurance companies are calling for much better support in the interpretation of regulatory requirements, with only 21% being satisfied with the current assistance they receive by the regulatory authorities.
- Insurers are increasingly receiving requests for recovery and resolution planning.
- Companies are beginning to invest significant effort in understanding how to manage their capital under Solvency II so that they are properly prepared for the new regime.
The right response for insurers
The bottom line is that insurers must now devote substantial resources to both near-term action and long-term planning in order to ensure compliance across all three pillars. For many respondents, the survey implies the need for rapid gap assessments, strong project leadership and targeted action to meet the confirmed deadlines.
For more information
|Download European Solvency II Survey 2014 as a printable document.|