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Solvency II: Side Effects

What to do about that medicine they call Solvency II? Side effects on European insurance regulation discussed. Also see SolvencyDeux.com

Actuary
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Solvency II: Side Effects

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  1. Solvency II: Are We There Yet? December 2010 presentation by Claude Penland, Associate of the Casualty Actuarial Society www.ClaudePenland.com

  2. What is Solvency II? • Solvency II is the updated set of regulatory requirements for insurance firms that operate in the European Union. • See Wikipedia at http://en.wikipedia.org/wiki/Solvency_II • More info at www.SolvencyDeux.com

  3. Solvency II Side Effects, Part One • Insurers might need to outsource their asset management http://bit.ly/aeaqhy • Stock portfolios sold off http://bit.ly/cZ56br • Captives might need to be run off http://bit.ly/cYq7w4 • Specialist employee costs are being jacked up http://bit.ly/9Mt0J0 • Not enough regulators with experience http://bit.ly/a7i21O

  4. Solvency II Side Effects, Part Two • International Financial Reporting Standards and Solvency II hit companies twice and from different angles http://bit.ly/9awkgy • Demand for bonds may be driven artificially high (and yields low) due to dumping of equities and buying of bonds http://bit.ly/bu3YM3 • Cost overruns http://bit.ly/cr4tPt

  5. Is Catastrophe Risk Appropriately Represented? • Mega Broker says no http://bit.ly/cHHoGz • Aon Benfield says no http://bit.ly/9Dbgt3 • Perils says that’s a mighty big catastrophe that insurers are expected to be prepared for http://bit.ly/9UENg2

  6. Solvency II Committees • Ironically, they say they must now simplify the plans they’ve charted. • Read more at http://www.claudepenland.com/2010/11/30/more-solvency-ii-hand-wringing-coming-out-of-european-mouths/

  7. European Pensions • Pension Funds & Insurers disagree. • Pension Funds don’t want to be regulated by Solvency II. • Insurers say what is good for the goose is good for the gander. • Read more at http://www.claudepenland.com/2010/12/01/european-insurers-versus-european-pension-funds-who-will-win-the-solvency-ii-argument/

  8. Final Points • Most recent Solvency II test results might be released in March 2011 http://bit.ly/aZZF3z • Japan, Switzerland and Bermuda are going through “equivalency tests” http://bit.ly/cnA5v1 • Expect M&A http://bit.ly/ae75Yk • Expect Redomiciles http://bit.ly/bnhumt

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