More than two thirds (68 percent) of European insurance firms think that Solvency II has been “gold plated” in their market as supervisors impose extra last minute requirements, according to the Insurance Europe, the European insurance and reinsurance federation.
The survey, carried out in November, covered companies that account for 92 percent of European insurance premiums and revealed an almost threefold increase from a previous survey carried out in June, which found that around 25 percent of member states were augmenting Solvency II requirements.
The latest data also revealed that the number of respondents whose supervisor was interpreting Solvency II in a conservative way has also increased, from 39 percent in June to 47 percent in November. However, despite all of these challenges, the survey confirmed that the vast majority of Europe’s insurers will be ready to operate under Solvency II from January 2016.
“These additional requirements and conservative interpretations come at an extremely challenging time for the industry,” said Igotz Aubin, head of prudential regulation at Insurance Europe.
“This is further compounded by the fact that the final quantitative reporting templates have only just been adopted by the European Commission, meaning insurers only recently received clarity on reporting requirements.
“These issues illustrate the significant challenges which insurers face as they approach 1 January 2016, when Solvency II comes into force.”
The survey did find however that a wide range of areas that respondents believed had seen improvement due to Solvency II. A total of 79 percent of respondents said that governance had improved, while 74 percent reported that risk monitoring and identification processes had been enhanced and 63 percent felt that data quality had increased.
Aubin added: “It is great to see Europe’s insurers making such good progress in implementing Solvency II, despite the challenging environment they face. However, I would like to stress that Solvency II is already an extremely conservative and extensive regime.
“It is, therefore, important — especially at this late point — to limit additional requirements and conservative interpretations.”
Insurance Europe, Solvency II, European Commission, Igotz Aubin, Europe, Bermuda