London companies prepare for solvency II

27 January 2010

Companies that successfully implement Solvency II may make efficiency improvements and gain a competitive advantage on their rivals, the International Underwriting Association has declared.

The new solvency regime for insurers in Europe will be an opportunity as well as a challenge, stated Nick Lowe, the association's Director of Government Affairs.

He commented as the IUA hosted a Solvency II seminar for more than 120 delegates from across its members in the London company market. The event designed to help those responsible for meeting the new regulatory requirements was fully subscribed months ahead of schedule.

He said:

“Firms are now clearly gearing up to meet the Solvency II challenge. Although the final details are not certain, many high level requirements are known since they have been set out in the European Union's framework directive. That sets out key responsibilities and functions, and in some cases departmental structures."

Steven Spano, CFO & COO of Assicurazioni Generali UK and Chair of the IUA's Accounts, Taxation and Solvency Committee, said:

“The new regime is more than just a revised set of capital requirements. It will affect risk management procedures, data storage and audit functions. New roles may need to be created to fulfil the tasks necessary for compliance with Solvency II.”

The IUA's Solvency II seminar included speakers from IUA member companies, Lloyd's, the Financial Services Authority and rating agencies. It focused on 'test run' exercises that firms are now undertaking, based on consultation documents already issued by the EU. It was held on 26 January at Royal Mint Court, London.

Nick Lowe added:

"The IUA is concerned that Solvency II is implemented fairly with realistic expectations about capital charges and the costs of change. But ultimately it should result in greater security and confidence in the European insurance and reinsurance industry. There should also be better cross-border cooperation between regulators.”
 
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