It has become a bit of a guessing game trying to figure out why the UK population voted for Brexit: was it immigration, money, sovereignty?
However, there is another meme that has always appeared in the UK’s wrangles with Europe and that is the issue of what people like to call “red tape.”
The view goes that outside the European Union (EU), the UK will be able to jettison many of the rules that it has found inconvenient.
There’s no doubt that many, even those who did not support the Leave campaign, would not weep to see the back of some of the more overbearing EU financial regulations.
Continue Reading “Don’t bank on Solvency II going away anytime soon” at the Actuarial Post
Rather than replacing Solvency II entirely when the UK leaves the European Union, regulators need to refine EU’s insurance regulation to make it more appropriate for the UK market and customers, according to the Association of British Insurers (ABI).
Following more than 10 years of implementation, costing more than £3 billion ($3.7 billion), or the equivalent of £140 ($174.40) per insured household, the ABI noted Solvency II is broadly fit-for-purpose for the UK market and there is no appetite from its members to withdraw from or completely replace it. (The ABI offered its comments in response to the UK Treasury Select Committee inquiry into Solvency II.)
“Solvency II has been part of the UK regulatory landscape and on UK insurers’ radars for almost a decade.
Continue Reading “With Brexit, UK Government Should ‘Refine Not Replace’ Solvency II: Insurers” at Insurance Journal News
UK insurance groups have claimed that the latest EU capital regulations are harming customers and distorting markets — and are calling for changes in the way they are implemented.
According to the Association of British Insurers, the Solvency II rules, which came into force at the start of the year, have had unintended consequences and a reassessment is needed.
Its comments come in a submission to parliament’s Treasury select committee, which has launched an inquiry into the post-Brexit future of Solvency II in the UK.
When it launched the investigation in September, the committee said it would look at the impact of the rules on customers, the economy and the competitiveness of the UK insurance industry.
Continue Reading “Insurers claim capital rules are harming customers” at Financial Times
In 1688, a gathering of shippers and investors at Edward Lloyd’s coffeehouse in London laid the groundwork for what would become Lloyd’s of London – the most powerful player in the most powerful insurance market in the world. More
than 325 years later, voters in the UK have seemingly threatened that business primacy by voting to exit the European Union.
The surprise decision in late June, popularly known as Brexit, raised questions for the global insurance industry and set the stage for some short-term economic strain on businesses in the US.
The vote quickly sent shockwaves through global markets as the pound plunged to $1.35, its lowest level since 1985. Yet despite that initial cratering, the stock market has quickly recovered.
Continue Reading “London falling?” at Insurance Business News
Britain’s impending departure from the European Union will be good for Bermuda’s reinsurance industry, according to the man at the helm of one of the sector’s leading companies.
Kevin O’Donnell, chief executive officer of RenaissanceRe Holdings Ltd, said at a conference yesterday that even island reinsurers with a Lloyd’s of London business — like his own — stood to benefit.
“Brexit will be good for Bermuda — we have Solvency II equivalence,” Mr O’Donnell said, while speaking on a panel at the Bermuda Reinsurance conference at the Hamilton Princess yesterday.
“From that perspective, I feel very good that Bermuda is our domicile and our home base.”
Bermuda was given third-country equivalence by the European Union with the bloc’s Solvency II regulatory regime for the insurance industry earlier this year, meaning Bermudian firms can compete on a level playing field in the EU marketplace.
Continue Reading “Brexit seen as good for island reinsurers” at the Royal Gazette
The European Commission has identified Solvency II as “one area where significant improvements could be achieved“, for example, by “simplification” and better “technical consistency“.
So, when it published its Call for Advice in July 2016, the Commission asked EIOPA to look at the “proportionate and simplified application of the requirements, and removal of unintended inconsistencies“, within the standard formula SCR, and between Solvency II and the CRR / CRD and EMIR.
The Commission also said that it would look at the possible “removal of unjustified constraints to financing“, especially when it comes to long-term investment, and that it might ask EIOPA for a technical advice on these issues later on.
Continue Reading “Blog: Solvency II and the standard formula SCR: Commission & EIOPA review – next steps” at JD Supra Business Advisor
Aviva plans to more than treble its investments in infrastructure — to £14bn — over the next five years as it seeks to boost returns amid rock-bottom interest rates.
In an interview with the Financial Times, chief executive Mark Wilson said the insurer would invest an extra £10bn in infrastructure around the world, on top of the £4bn it has invested so far.
Insurers are increasingly turning to investing in infrastructure as an alternative to low-yielding government and corporate bonds. The long-term nature of infrastructure projects such as roads, energy plants, schools and hospitals, which pay out over years and decades, are a good fit for insurers’ long-term liabilities.
Continue Reading “Aviva plans further £10bn infrastructure injection” at Financial Times News
The FINANCIAL — The euro area banking sector consolidated further in 2015, according to the ECB’s 2016 Report on Financial Structures, which is published on October 27.
The report also finds that banks’ capital ratios improved and that non-performing loan (NPL) ratios fell across the sector for the first time since the financial crisis, although they remained persistently high or increased further in some countries.
The report finds that banking sector consolidation in 2015 was driven by continued pressure to contain costs, deleverage and restructure. The number of credit institutions in the euro area declined to 5,475 at the end of 2015, from 5,614 at the end of 2014.
Continue Reading “Report on financial structures details structural changes in the euro area financial sector ” at The Financial News