A vast majority of UK non-life insurance companies are frustrated by the way Solvency II is being introduced, according to research published by Grant Thornton today.
In a survey of senior executives from non-life insurers, 82% told the consultancy the principles of the new rules governing Europe's insurance industry had been 'ruined' by their implementation. This was despite 99% of respondents believing the principles underpinning the new regime to be good.
A similarly high percentage (89%) said the rules as they were currently envisaged were 'too complicated'.
Solvency II, which places new capital and supervisory requirements on insurers, had been expected to apply to companies from January 2014, but delays in the progress of the legislation needed for them to be introduced have led to concerns they might be take effect later - or not at all.
Grant Thornton said the results of its survey showed there was a 'clear increase' in frustration with the implementation process and the complexity of the rules as they stood.
Simon Sheaf, general insurance practice leader at the consultancy, said: 'Regulators and supporters of Solvency II should be very concerned by the market's reaction and it is vital that they now effectively promote the benefits of the new regime and persuade the market of its usefulness.'
Sheaf warned insurers against halting their preparations for Solvency II, despite the delays to its implementation.
'There is still a significant amount of work to do and it is best that firms begin to tackle it as soon as possible. Although some minor details of the new regime are expected to change between now and the final implementation date, the structure as currently envisaged will not change substantially. If insurers lose momentum at this stage, it is going to be far more difficult and far more costly for them to pick up the pace later.'
