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The Actuary The magazine of the Institute & Faculty of Actuaries
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Confidence dips in banking, insurance and finance sector

Peter Allen, head of the Financial Services Group at Grant Thornton, said: "For the insurance industry, 2011 so far has been characterised by a series of expensive catastrophes which have hit profitability — but not sufficiently to create a turn in the pricing cycle. Natural disasters in New Zealand, Australia and Japan have meant that first half results for most re-insurance businesses are showing losses that, combined with a poor pricing environment and investment returns, are reducing confidence in the sector.

"There is also continued regulatory pressure, with high levels of uncertainty as to the timing and final scope of Solvency II and the transfer of UK regulatory oversight from the FSA. Solvency II has required a significant investment of both time and money by re-insurers, as they put in place the wide-ranging changes to capital and reporting requirements. The fact that there is still debate as to whether the implementation date will be January 2013, or the start of 2014, is not helping the industry to feel that it can prepare with confidence."

Further information is available from the ICAEW website.