Jane on Groups 

I’m Jane Portas and I lead KPMG Europe LLP’s services in relation to strategic restructuring for insurance companies.  What that means is that I, together with our cross-border team, work with clients to help them optimise their group capital and operating structures. 

Solvency II, together with wider regulatory change, both in Europe and more globally, is already influencing the shape of the global insurance industry.  One of the key things that Solvency II introduces, which is a big step change from its and other predecessor regimes, is the concept of Group Supervision. 

What Group Supervision seeks to achieve, is to enable regulators of entities in their jurisdiction, to understand the group risk posed to those regulated entities through their membership of a group and to set capital and other requirements to accommodate them. 

And the types of activity that we’re seeing in Europe is insurers with multiple subsidiaries operating across Europe, consolidating into single Pan-European insurance companies, operating through branch networks, to realise capital benefits and efficiencies that they wouldn’t realise if the subsidiaries were retained.
 
One of the biggest challenges that clients are facing in implementing Solvency II is their strategy towards the group supervision regime. That applies to both the European groups and the non-European groups, and one of the ways in which we are helping them is to take a holistic approach to how this can be addressed.  So for example, we’re working with a number of organisations to help them rationalise their European structures through consolidation of a number of entities within Europe, to drive out capital benefits.

 We are helping firms to review their entire operations to identify areas of simplifications and rationalisation, to enable effective application of the regime.
We are helping them to think through new and innovative capital structures, to achieve the most capital efficient structure going forward for their business. 

We’ve worked with many global listed and leading insurance groups in the last few years, helping them to optimise their structure. 

We have an established team; we have been helping clients with strategic restructuring for  many years.  I have been doing this for over 20 years and my colleagues have similar experience.  So we have a multi-disciplinary team, we have our cross-border networks; we also now have our Centres of Excellence for regulation, which reinforce the importance of regulation as an influencer in the global insurance environment.