“Atos Origin uncovers insurance industry concerns over Solvency II EU Directive”
London, 18 April 2011
Just 20 months remaining before pan-European legislation comes into effect and uncertainties over implementation and application of the regulation persist
Atos Origin, an international IT services company, today launched research that uncovers significant concerns amongst insurance companies regarding the implementation of the Solvency II European Union (EU) Directive, which is scheduled to come into effect in 2013.
Solvency II is intended to facilitate the development of a Single Market in insurance services in Europe, whilst securing an adequate level of consumer protection. However, new research, conducted by POST Europe, part of the leading insurance publishing group, amongst insurance companies reveals that while the principles behind the EU Directive are welcomed, a host of practical concerns remain. These include:
- Application across EU - The danger that, due to national regulatory bodies and national agendas, the new regulations will not be applied equally across the European Union
- Resourcing - The demand for experienced actuarial and risk employees has generated recruitment and retention issues in the UK, which are seen to be spreading to the wider European market
- Organisational change - The need of some insurance businesses to make major changes to their organisation and operating model in order to embed the regulations effectively
- Adaptable rules - Uncertainty that the regulations may not be sufficiently ‘fluid' to take account of ‘real world' issues
According to the senior insurance executives included within the research interviews, a major concern is the ability of national regulators to enforce the Directive. “Some of those we interviewed sited cultural differences between Northern and Southern Europe as the reason they fear the equal applications of the regulations across the EU,” said Henk-Guus Krekel, Partner for Financial Services, Atos Consulting. “Others were concerned about the challenge of regulating the Directive evenly given the significant differences in the current regulatory environment in different countries. What came out from the research too was a strong concern that national regulators, still recovering from the set-backs in the banking sector, had neither the appropriate knowledge of the insurance industry, nor sufficient resources to manage the process.”
The issue of resourcing within the insurance industry is also a cause of some disquiet amongst the executives questioned. The primary concern in this regard is access to sufficiently qualified and experienced actuarial and risk staff. According to many of those interviewed, the move to implement Solvency II by individual insurance companies has driven wage inflation as organisations scramble to employ the best people. This is exacerbated also by the needs of national regulators to have the right resources in place before 2013.
A further concern for the European insurance industry is that, while the rules can be interpreted according to each company's business model, a number of the key details of the Directive remain to be finalised. “It is perfectly natural that insurance executives would be concerned. They are, in some cases, making major changes to how they operate and these alone could take many months to be imbedded effectively within their organisations. If the details have not been decided yet, this in itself will cause delays.” said Henk-Guus Krekel, Partner for Financial Services.
“Although Solvency II was planned before the financial crisis of 2008, its development has certainly been influenced by this seminal event,” said Henk-Guus Krekel, Partner for Financial Services, Atos Consulting “And while there is general support for it, we cannot escape the fact that some still question the applicability of this new regulatory regime. One interviewee summed up this view by saying to our research: ‘It's not an insurance industry crisis, it's a banking crisis. The insurers performed well during the crisis.”
Representatives from the top European insurance companies took part in the research including Achmea, Amlin, Aegon, Assurant Solutions, Barbican Insurance, Markel International, Munich Re, Wesleyan Assurance Society and Zurich. Interviews were conducted by Post Europe during January and February 2011 that covered areas including: companies' preparations for Solvency II; what they viewed as the major challenges and opportunities; and how they expected to operate under the new regime.
About Atos Origin
Atos Origin is a leading international Information Technology (IT) services company, providing Hi-Tech Transactional Services, Consulting, Systems Integration and Managed Services to deliver business outcomes globally. The company's annual revenues are EUR 5.0 billion and it employs 49,000 people. Atos Origin is the Worldwide Information Technology Partner for the Olympic Games and has a client base of international companies across all sectors. Atos Origin is quoted on the
Paris Eurolist Market and trades as Atos Origin, Atos Worldline and Atos Consulting.
About Post Europe
Post Europe is part of Post Magazine, published by Incisive Media. Post Magazine has been serving the insurance industry since 1840. It is well-established as the leading paid-for weekly magazine with a readership of more than 40,000, and is essential reading for insurance professionals.
From the award winning team at Post, Post Europe is an online-only extension of the brand, which aims to cover topics of interest to those based in the European insurance market including insurers, brokers, loss adjusters, legal firms and other suppliers. As well as daily news, Post Europe engages with the major European firms operating in the insurance sector for more in depth comment, opinion and comprehensive analysis of developments in the industry, as well as interviewing major players in the market
For more information, please contact:
Tel: 020 7830 4233
Ian Meikle/Charlotte Pusey
MSL London for Atos Origin
Tel: 020 7878 3137 / 3255
Email: firstname.lastname@example.org / email@example.com