Solvency II ‘life support’ is a step in the wrong direction

Life companies in Europe are facing years of consolidation as they struggle to get to grips with the Solvency II requirements. revenue-wrong-direction

Having already endured a prolonged period of hurt around 20 years ago, life companies in the UK are in a better position but still not a great one, according to Ned Cazalet.

The founder and chief executive of Cazalet Consulting, which provides strategic advice, market intelligence and support to financial institutions, has serious concerns about the direction and speed of Solvency II and the life support it offers to companies he feels should be allowed to fail.

Continue Reading “Solvency II ‘life support’ is a step in the wrong direction” at International Adviser

M&G Investments could move funds if Britain loses access to single market

The new boss of M&G Investments said it could shift funds to Dublin and Luxembourg if Britain loses single market access following the Brexit vote.oped_2

Chief executive Anne Richards, who recently joined from Aberdeen Asset Management, said the decision would depend on the outcome of the UK’s Brexit negotiations, but the firm needed options so it was in a position to “react and adapt”.

M&G profits dropped by 10% to £225 million in the first half of the year after seeing £7 billion of net outflows.

Continue Reading “M&G Investments could move funds if Britain loses access to single market” at Belfast Telegraph

UPDATE 2-Axa’s half-year profit boosted by property sales

ARIS, Aug 3 Axa, Europe’s second-biggest insurer, reported a weaker than coins-graphexpected 4 percent rise in its first-half net profit, hit by lower investment returns, higher claims and despite a boost from real estate sales.

Europe’s biggest insurer after Germany’s Allianz said it made a profit of 3.2 billion euros ($3.6 billion), falling short of the consensus market forecast of 3.6 billion.

A 1 billion-euro gain from the sale of two properties in New York City was partly offset by disposals of units in the UK and Portugal and losses on financial instruments, Axa said.

Continue Reading “UPDATE 2-Axa’s half-year profit boosted by property sale” at Reuters News

European insurers put investment mix under a microscope

Most European insurers are examining changes to their investment mix to adapt to the adverse investment climate, which includes record-low interest rates that challenge the earnings and capital adequacy of insurers, Standard & Poor’s Corp. said Wednesday in a report.1607276775

But on average, most European insurers’ strategic asset allocations have remained broadly stable the past five years, S&P said in the report, “How West European Insurers Are Scrutinizing Asset Allocations and Business Models in Today’s Adverse Environment.”

According to the report, which studied about 40 insurers rated by S&P, adapting to the challenging investment environment “is not as easy as chasing after higher-yielding investments.”

Continue Reading “European insurers put investment mix under a microscope” at Business Insurance News

General insurers need thorough review on capital extraction when firms run-off, says PRA

In an update of its supervisory statement, the regulator says such firms runoff_GlenEllen_4682occasionally approach them with requests to withdraw capital.

The PRA recognises that these requests may be legitimate in certain circumstances, but points out that the move “inevitably” weakens the level of protection available for remaining policyholders.

“This is of particular concern for the PRA in respect of firms in run-off, since these firms, compared to other insurers, may have more limited access to further capital, and often have fewer management actions available to them to restore capital levels if the need subsequently arises,” said the PRA in the statement.

“For example, the financial position of such firms can be adversely affected by unexpected reserve deterioration as new risks emerge or through changes in the expected frequency or severity of known risks.”

Continue Reading “General insurers need thorough review on capital extraction when firms run-off, says PRA ” at The Actuary News

Mifid II remuneration rules not to apply across industry

The Financial Conduct Authority has decided against applying Mifid II’s remuneration rules across the whole of the sector.TrafficMonsoon-rémunération-2

Its decision means the rules will only apply to businesses regulated by Mifid II itself, which is due to come into effect in January 2018.

Last year the FCA asked the industry whether remuneration standards for sales staff and advisers should be extended across to non-Mifid II businesses, for example by introducing a crosscutting set of standards on sales staff remuneration.
There was a mixed response from the industry, with some claiming it would create a consistent regime while others said it would be best to wait for other European initiatives to be completed to find out their impact.

Continue Reading “Mifid II remuneration rules not to apply across industry” at FT Adviser

Transatlantic Insurance Talks Continue as U.S. Industry Signals Frustration With EU

Regulators from the European Union and United States met in Brussels this week to continue talks on aligning their insurance regulations amid growing 14325899679_179347cec0_bconcerns from a key U.S. industry group that says implementing the new rules will hurt their members doing business in Europe.

A joint EU-U.S. statement that the Treasury Department released Thursday said talks took place on July 25 and July 26 for a “covered agreement” on insurance and reinsurance issues.

The two economies are holding the talks, authorized by the 2010 Dodd-Frank Act, in large part because of a new EU regulation that establishes rules on reinsurance supervision and collateral requirements.

The substantive issues negotiators discussed were identical to the last round of talks in May, and they included reinsurance collateral.

Continue reading “Transatlantic Insurance Talks Continue as U.S. Industry Signals Frustration With EU” at Morning Consult News

AFA Insurance Decides on BearingPoint’s Solvency II Product as SaaS

FRANKFURT, Germany–(BUSINESS WIRE)–Management and technology consultancy BearingPoint, which ranks among the leading providers of regulatory software, announced that AFA Insurance, a major Swedish insurance company, cloudselected the proven ABACUS/Solvency II as a Software-as-a-Service (SaaS) solution.

AFA Insurance is an organization owned by Sweden’s labor market parties and insures around 4.5 million employees within the private sector, municipalities and county councils.

Johan Dahlgren, CFO at AFA Insurance, stated: “We opted for ABACUS/Solvency II for two major reasons: It’s a proven solution and it was available as SaaS.

So we will be able to achieve a rapid deployment within a few months with customized processes.”

Maciej Piechocki, Partner at BearingPoint, commented: “We are proud that AFA Insurance decided on a BearingPoint solution.

Continue Reading “AFA Insurance Decides on BearingPoint’s Solvency II Product as SaaS” at BusinessWire

China Regulators Echo U.S. on Global Insurance Standards

July 26 — Chinese insurance regulators echoed their American counterparts during a recent visit to the U.S., urging a go-slow approach in developing international insurance capital standards that would allow for jurisdictional control of implementation.China-2

The officials of the fourth-largest insurance market sounded a lot like U.S. regulators, lawmakers and industry officials who have steadily pushed back against the International Association of Insurance Supervisors (IAIS) proposal for global insurance capital reserve requirements.

U.S. officials have argued that those requirements are unfair to countries with insurance governance styles dissimilar to the European Union’s Solvency II regulatory regime (See previous story, 06/08/16) (See previous story, 06/17/16).

Continue Reading “China Regulators Echo U.S. on Global Insurance Standards” at Bloomberg BNA

XL Group completes redomestication to island

Bermuda is officially home for the XL Group Ltd after it completed its redomestication to the island today, a move that Bermuda_wvwas announced at the beginning of the year.

The international insurer and reinsurer started operations in Bermuda in the mid-1980s, and has maintained offices on Bermudiana Road. However, its holding company was always domiciled in the Cayman Islands until the firm moved to Ireland six years ago.

The company’s historical link to the island, and Bermuda’s success in obtaining Solvency II third-country equivalency from the EU, were factors in the decision to move from Ireland to Bermuda.

Continue Reading “XL Group completes redomestication to island” at Royal Gazette

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