One of the key changes that Solvency II brings is the way the regulator views insurance groups, both in Europe and beyond.
Under the current regime the supervisors in Europe are required to make a purely formulaic assessment of solvency requirements, both at European level and at worldwide group level to try and get a sense of the overall solvency of the group. Under Solvency II the landscape changes and it can have quite significant strategic and operational implications.
The groups' regime is an area that has perhaps not been focused by many to date, most likely because of the complexity of the solo requirements. But the focus on group supervision is really gathering pace now and many groups are now seriously considering both the structural and strategic business implications, and also the practicalities of how they're going to operate within it.
Regulators are sensitive to the pressures on groups and there is a lot of discussion going on, particularly at European level, around some of the issues arising from the group supervision regime. It is important that there is a collaborative discussion between all stakeholders to enable agreement of a response that is satisfactory from both a group and a regulatory perspective.
At KPMG, our in-depth technical expertise and practical experience can help clients address the challenges they will face in embracing this structural evolution. Our investment in a number of thought-leadership initiatives with CEIOPS and the FSA helps us understand the implications of regulatory changes, and - most importantly - offers practical insights to cutting through complexity and satisfying them.