Confidence that the insurance industry will achieve Solvency II compliance by 2013 has dropped by 17 percentage points.
- Only 46% of insurers are confident the industry will meet Solvency II deadline, down from 63% in 2010;
- 40% of insurers have 40% or less of their dedicated Solvency II personnel in place, with 12% of insurers having only embedded 20%;
- 57% of life insurers expect they may need to reorganise or restructure, compared with 36% of non-life insurers.
Confidence that the insurance industry will achieve Solvency II compliance by 1 January 2013 has dropped by 17 percentage points, according to research conducted by the Economist Intelligence Unit (EIU) on behalf of Deloitte.
The report, which assesses UK insurers’ readiness for Solvency II, found that just under half of respondents (46%) were confident or very confident about the prospects for industry compliance, compared to 63% in 2010. However, insurers were more optimistic about their own chances of achieving compliance than of the industry as a whole, with 73% stating they were confident or very confident they will be ready for Solvency II.
65% of insurers said they expect to introduce new risk mitigation techniques due to Solvency II, whilst almost half (47%) said they may need to reorganise or restructure, compared to approximately one-third last year (34%).
Life insurers were more likely than non-life companies to say that they may need to reorganise or restructure (57% vs 36%) and were also were more likely to say that they may need to launch new products (33% vs 11%). 57% of life companies were more likely to have reached implementation stage, compared with just 46% of non-life insurers.
Overall, insurers ranked implementation planning and personal incentivisation highest in terms of priority for the six months’ ahead. Non-life insurers specifically cited implementation along with data infrastructure and handling, while life companies said the focus would be on personal incentivisation and risk governance systems.
Rick Lester, lead partner of the Solvency II team at Deloitte, said: “Clarification from regulators remains a top concern for the industry as insurers prepare for the new regime. The European Insurance and Occupational Pensions Authority (EIOPA) is under significant pressure to provide more straightforwardness and transparency to support the industry in its preparations, meaning that insurers will need to continue working with EIOPA and local regulators to address this problem.”