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  • Industry: Financial Services, Insurance
  • Type: Business and industry issue
  • Date: 25/09/2012

Solvency II Benchmarking Survey - Life Insurers 

An executive summary, highlighting some of the key findings from our recent Life Technical Practices Survey. This year’s survey has taken on a new form to reflect the current main focus of the UK life insurance industry, ie the implementation of Solvency II.

Solvency II Benchmarking Survey - Life Insurers
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This survey provides an insight into how companies in the UK Life Insurance industry are progressing in their preparations for the arrival of Solvency II; how they will comply with the new regulations; and whether the industry has found common ground or is widely dispersed in its approaches.

 

Key findings:

 

  • Insurers are only now starting to focus on the wider business impacts of Solvency II such as corporate structures, product design and pricing, and asset allocation strategies;
  • Documentation ranks top of the implementation challenges – a common theme across all three Pillars;
  • 83 percent of those using an Internal Model (IM) believe they are on track - the main challenge being the technical build;
  • 54 percent highlighted Counterparty Risk as the most complicated Standard Formula stress to compute;
  • ORSA is a key area of concern, ranking 3rd in the list of implementation challenges - 56 percent believe they still have significant work to do;
  • Lack of guidance in some areas remains a problem and although the date change gives more time, firms urgently need clarity;
  • Marked variances in the tax methodologies, particularly around the assumptions used to support deferred tax asset recognition; and
    Questions over the level of independence being achieved in model validation and preparation of the validation report.
 

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