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The Actuary The magazine of the Institute & Faculty of Actuaries
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60% of European insurers support Solvency II delay

A majority of European insurers believe that 1 January 2014 is a more appropriate starting date for implementation of Solvency II, according to research from Aon Benfield.

Sixty per cent of European insurer delegates attending the firm’s International Analytics conference backed the one-year delay announced by the EU Council last week as part of its fourth Presidency compromise text on the Omnibus II directive [The Actuary 24 June”.

However, 31% of the delegates were opposed to the delay and continue to work towards the January 1, 2013 deadline. The remaining 9% thought "maybe" the regime should be delayed.

Aon Benfield highlighted potential delays to the current timetable as Omnibus II must firstly be passed into legislation before the European Commission can formally adopt the regime’s implementing measures (Level 2) and implementing guidance (Level 3). All of these components have to be passed into legislation following the required consultation periods, ahead of Solvency II’s inception.

The survey also found that insurers have concerns about the level of understanding of their local regulator. Sixty one per cent thought their regulator was not up to speed with internal models, and just over half (54%) said their supervisory body was lagging behind on underwriting risks, and catastrophe risk in particular.

Despite the majority in favour of the delay, Aon Benfield believes that companies should still be aiming for a 2013 deadline.

"Insurers need to take strategic decisions and be prepared to change their business model in order to be ready in time," says Gareth Haslip, head of risk and capital strategy for Europe, Middle East and Africa.

"By meeting the 2013 deadline, companies that have a good grasp of Solvency II will have more time to focus on how best to operate their business for the benefit of their shareholders in this new environment. Being prepared will also bring a competitive advantage."