Financial Services

Are you ready for Solvency II?

At the recent Trilogue meeting, the European Commission proposed a deferral of the implementation date of Solvency II to January 1, 2015, but the proposal did not reach consensus.

• Solvency II contacts

Are you ready?

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Potential delays for Solvency II timeline

Insurers will have to continue their balancing act, adopting SII while the issues of timescales and long-term guarantees hang over them.

Risk-based capital and governance in Latin America

Argentina, Brazil, Chile and Mexico have individual views on risk-based capital and the implications for insurers as they drive towards compliance.

Implementing IFRS 4 Phase II with IFRS 9 and Solvency II

The size and complexity of the multi-year implementation of IFRS 4 and IFRS 9 is expected to impact companies fundamentally. Given the potential synergies and differences, the time to address these issues is now. See our implementation and project management considerations from an IFRS 4 Phase II and IFRS 9 perspective.

Solvency II implications for Asian life insurers

While many elements of Solvency II, a European framework, may represent a "to-be" roadmap, not everyone sees the full adoption as an optimal (or practical) next step in many Asian markets. Eventually, each Asian market will plan its own journey towards a more robust regulatory evolvement.

Solvency II publication archive

Tap into our archive of thought leadership reports and gain insight into the evolution of Solvency II and its impact on the industry.

Actuarial and risk management strategies

Never has it been more critical for insurance companies to identify and assess new options for value creation whilst continuing to manage the downside risks and complying with the requirements of new regulations such as Solvency II and IFRS. Insurance companies aspire to be well prepared and ready for the regulatory, economic and commercial uncertainties. We help companies identify sources of value creation and prepare them for these requirements and uncertainties.

We have over 950 actuarial and insurance risk professionals across the globe, and by partnering with other services across Ernst & Young, we aim to provide truly integrated services across all disciplines in the Insurance and Financial Services industries. Through our deep knowledge of the global insurance industry, local regulatory expertise and our understanding of the industry, we have built a strong reputation as a leading insurance industry advisor.

We work with financial institutions (insurance companies, banks, pension funds, private equity firms, sovereign funds) as well as with local regulators to provide advisory services. Insurance companies worldwide are undergoing radical changes and there are some key questions to consider in the journey to value generation.

• Risk and capital

  Insurance companies are increasingly changing their focus from static to dynamic optimisation of their risk portfolio as capital becomes a scarce resource and competition from other financial institutions increases. Dynamic optimisation involves continuous decision making on accepting, transferring, mitigating or rejecting risks and companies require credible, timely and fit for purpose insights to implement these decisions. We help companies optimise their risk portfolio under the current as well as expected new regulations such as Solvency II.

• Customer and growth

  The insurance industry will be affected by a number of factors including environmental/political changes, socio-economic factors, product innovation and competition with other financial sectors, technological advancements and changing customer behaviour. We help companies understand these changes and help them prepare for these by providing practical experience and global insights and surveys. We also help companies understand which customers really create value and help with strategies to focus on value generating customer activities.

• Financial reporting

  The insurance industry globally is undergoing a wave of new regulations and reporting requirements. It is important for companies to understand the implications of new reporting requirements, both on reported figures and on the wider business environment including companies’ business strategic and operational management. We help companies in understanding and preparing for an efficient external and internal reporting framework by providing actuarial services as part of integrated multi-disciplinary solutions.

• Actuarial transformation and offshoring

  Insurance companies are increasing their focus on making actuarial and risk processes efficient and realising cost benefits. Companies are considering integrated finance, actuarial and risk reporting processes, use of shared service centres for achieving standardisation in quality of output, and off-shoring of certain actuarial skill sets to achieve cost-effectiveness. We help companies in simplifying their actuarial infrastructure and realising cost efficiency by streamlining or off-shoring/outsourcing their actuarial and finance reporting processes.

• Modelling

  Actuarial and risk models are increasingly becoming important to the business operations and the focus on the output from these models is growing. Whilst the requirements for a fast close of actuarial reporting is a concern for companies, regulatory focus, and the requirement to put a robust control environment around models is increasing as well. We help companies make their actuarial and risk models efficient and fit for purpose.

• Audit and Assurance

  Our actuaries work within our audit teams to assess the appropriateness and accuracy of the most critical elements of insurance company financial statements, including the actuarial reserves and other key estimates calculated using specialised actuarial techniques. Actuarial audit activities reduce the risk of critical errors in financial statements and the risk of inaccurate assessment of the financial risks to which the enterprise is exposed. Our actuaries provide insight to company management and Board of Directors on items of strategic importance. They also provide focused advisory assistance on matters observed through the audit process. Actuaries working in audit and assurance also perform audit-like services for non-audit clients, including reserve reviews, regulatory examinations and assistance in the adoption of new financial reporting standards.

• Asset management

  Asset management is interlinked with capital optimisation, product optimisation and financial modelling. With continuing product innovation and competition from other financial sectors, optimal asset management strategies are key to achieving competitive advantage. We help companies in their asset liability management, derivative pricing and performance management.

• Merger and acquisitions

  As companies revisit and optimise their portfolio, they will look to acquire and consolidate more attractive businesses, and dispose of the businesses where they cannot compete in. With depressed valuations in many insurance markets and the changing business strategy of large multinationals, the mergers and acquisitions market is poised to become more active. We provide integrated services with our Transaction Advisory team to help companies in valuations and post merger integration.

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• Financial Services: Bringing the broader perspective

Be prepared for IFRS/accounting changes

We are increasingly living in a global economy — with trade and inbound and outbound investment a fact of life. It's no wonder capital markets have long advocated for globally recognised accounting standards.

Until recently, that common accounting language has been a missing link. Now, policymakers, lawmakers and regulators are working alongside standard-setters to provide a single set of high-quality, global accounting principles.

Benefit from our timely insights as your prepare for this transition.
 

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Use our insurance business impact accelerator tool

Have you developed a roadmap for implementing IFRS Phase II? Use our insurance business impact accelerator tool to help evaluate and overcome your key challenges.

Limited improvements to IFRS 9 for insurers

Now that the IASB has confirmed its intention to consider making limited improvements to the IFRS 9 classification and measurement model, they are working with the FASB to align more closely. What is the impact on your accounting models and when should you being adopting them?

Implementing IFRS 4 Phase II with IFRS 9 and Solvency II

The size and complexity of the multi-year implementation of IFRS 4 and IFRS 9 is expected to impact companies fundamentally. Given the potential synergies and differences, the time to address these issues is now. See our implementation and project management considerations from an IFRS 4 Phase II and IFRS 9 perspective.

IFRS 10 Consolidated Financial Statements

In May 2011, the International Accounting Standards Board (the IASB) issued IFRS 10 Consolidated Financial Statements, which becomes effective for annual periods beginning on or after 1 January 2013. IFRS 10 must be applied retrospectively.

IFRS / accounting change publication archive

Tap into our archive of thought leadership reports and gain insight into the evolution of IFRS / accounting change and its impact on the industry.

Customer agenda

The buying behaviors, attitudes and preferences of insurance customers worldwide are changing. To understand this transformation, insurers need to determine how they must adapt to attract, deepen and preserve customer relationships.

• On-demand: Voice of the customer: time for insurers to rethink their relationships

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Global consumer insurance survey 2012

To help insurers determine how they must adapt to attract, deepen and preserve customer relationships, we surveyed 24,000 insurance consumers across 7 regions.

Governance facing the industry today

We, along with Tapestry Network, established the Insurance Governance Leadership Network (IGLN), a global network centered around non-executive directors from a select group of the largest insurers from Europe, North America and Asia. The IGLN provides a peer-to-peer platform for participants to discuss critical issues facing the industry globally. Its primary focus is the non-executive director, but it also engages senior management (notably chief risk officers) and regulators, all of whom are committed to outstanding governance and supervision in support of the mission to build strong, enduring, and trustworthy insurance institutions.

Tapestry Briefings – A View from the Boardroom:

• Insurance industry facing real challenges: a view from the boardroom
• Global insurance leaders find common ground amid economic and regulatory uncertainty

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From the Boardroom: Insurance leaders meet in London

We, along with Tapestry Networks, welcomed industry leaders to the European Insurance Governance Leadership Network (IGLN) meeting in London where executives discussed today’s changing regulations.

Operations and technology: implementing efficiencies

In recent years, a new generation of technologies has created a renewed appetite amongst insurers for using IT to manage claims more effectively.

Yet there are still a large number of challenges to be overcome in delivering the anticipated business benefits. Are you achieving the improved claims performance you need from your IT investments?

According to our latest research, insurers could get much greater value by changing their approach.

Our survey "Delivering results through claims technologies" explores the challenges and opportunities of investing in claims technologies in France, Germany, Italy, Spain and the UK.

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• Learn more about our Insurance claims advisory services

The emergence of emerging markets

The global economy is at a turning point. Fast-growth economies in Asia, the Middle East, Africa, Latin America and Eastern Europe now form almost half of global GDP and, in 2010, they contributed 70% to overall global growth.

These trends are accelerating. By 2050, fast-growth economies are projected to account for 65% of the global economy. In contrast, most developed markets are still struggling to recover after the global recession. For many businesses, their very survival depends on pursuing a growth agenda. This might include expanding into new markets and sectors, finding new ways to innovate or taking new approaches to talent. But there’s one key question that must be answered: how can your insurance business make the most of the many opportunities that exist?

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• Risk-based capital in Latin America
• Growing Beyond
• Capturing the momentum: Ernst & Young's 2012 Attractiveness Survey - Brazil
• Rapid-Growth Markets Forecast: Summer 2012