Analysis by Willis Towers Watson finds the current formula is causing higher premium rates, reduced competition and poor value for consumers
LONDON, Thursday 16 March, 2017 — Willis Towers Watson has responded to a European Insurance and Occupational Pensions Authority (EIOPA) Discussion Paper on the upcoming review of Solvency II, where it has identified significant flaws in the formula used to calculate the risk margin and recommended a fundamental review of its methodology and calibration.
Kamran Foroughi, Director at Willis Towers Watson, said: “We believe the high level of risk margin currently attached to long-term insurance products is resulting in higher premium rates and reduced competition, leading to worse value for consumers.”
Willis Towers Watson’s submission notes that the risk margin has become a much more material component of insurers’ balance sheets, leading to a number of challenges and changes in business practice, including:
• Asset Liability Matching. Insurers’ ALM challenges related to risk margin have been exacerbated by falling interest rates.
• Risk transfer. The bigger the risk margin relative to the rest of the technical provisions, the more insurers are incentivised to offload risk to reduce the risk margin.
This can be done via reinsurance to a company outside the EU which is not bound by Solvency II rules. Continue reading Flawed Solvency II risk margin is hurting consumers
NN Group and Delta Lloyd announce today that a conditional agreement (the ‘Merger Protocol’) has been reached on a recommended public offer (the ‘Offer’) to be made by NN Group for the entire issued and outstanding ordinary share capital of Delta Lloyd (the ‘Shares’) for EUR 5.40 in cash per ordinary Delta Lloyd share (cum dividend) (the ‘Offer Price’).
This announcement follows constructive interactions between the boards and management teams of both companies including a period of targeted due diligence.
Lard Friese, CEO of NN Group: ‘Today’s announcement is a significant step in our journey to build a sustainable, profitable business for the future, and to strengthen our leading position in the Netherlands and Belgium..
I value the entrepreneurial spirit, customer focus, the commercial agility, and strong distribution capabilities of Delta Lloyd.
Continue Reading “NN Group and Delta Lloyd agree on recommended transaction” at NASDAQ Globe News Wire
Advanced software updated for innovations in reserving, improved performance and usability
London, Tuesday 19 January, 2016 — Global advisory, broking and solutions company Willis Towers Watson (NASDAQ: WLTW) has released ResQ 4.0, an updated version of its reserving software for property and casualty (P&C) insurers.
With ResQ 4.0, Willis Towers Watson has concentrated on ensuring the software keeps pace with advancements in computer technology while improving the user experience, particularly around ease of use and efficiency. The principal updates include:
- A 64-bit version of ResQ, in addition to the existing 32-bit version, beneficial for companies with very large ResQ databases and for stochastic analyses with an extensive number of simulations; also provides support for clients wanting to use 64-bit Microsoft Office…
Continue reading Willis Towers Watson Introduces Updated Version of ResQ Reserving Software
Global Credit Research – 26 Oct 2015
London, 26 October 2015 — Moody’s Investors Service held its first Egypt Insurance roundtable event today in Cairo under the theme ”Understanding Insurance Credit Risk: The Case of Egypt” to discuss the Egyptian insurance market.
The event will also cover Moody’s Global Outlook on Reinsurance and the impacts on the global insurance industry of Solvency II. The event was followed by a media roundtable.
“The Egyptian insurance market benefits from being relatively untapped, as reflected by low insurance.
Continue reading Announcement: Moody’s first Egypt Insurance Credit Risk Roundtable covers growth and Solvency II implications
London – Monday 26 October, 2015 – UK life insurers report major changes in how they are having to assess and measure longevity risk within Solvency II internal models, according to research by Towers Watson.
In its annual study of risk calibration methodologies*, which received responses from the majority of UK life insurers seeking internal model approval, Towers Watson found that six firms strengthened their longevity risk calibrations by at least 20%†.
Tim Wilkins, a senior consultant at Towers Watson, said: “The approval process for Solvency II has been very painful for insurers and the survey results show some have had to make major changes to their models, but the next step for those who do get across the line in January 2016 will be just as critical as they begin to embed and apply their internal models.”
Continue reading New rules raise the bar as life insurers optimise risk models
French insurance companies have completed the first round of reporting against the new European Solvency II framework, which required not only more information to be submitted, but also required the data to be provided in XBRL.
The recent partnership between Effisoft and UBPartner, combining expertise in insurance and XBRL systems, has resulted in customers in France being 100% successful in their initial Solvency filings.
Paris, France (PRWEB UK) 23 February 2015
Adopting a new technology is never easy and always poses some unexpected challenges. Insurance companies in France recently faced such a challenge, as they implemented the new Solvency II reporting framework based upon XBRL.
The issues they faced were threefold: not only was XBRL being used for the first time; but the Solvency II framework involves more extensive data to be gathered, checked and submitted; plus there were some tight implementation deadlines.
Continue Reading “Combining Insurance and XBRL knowledge is the key to 100% success in Solvency II reporting” at Press Release Rocket
London (PRWEB UK) 28 May 2014
Swiss Re has implemented BearingPoint’s ABACUS/Solvency II reporting solution. This software package enables full reporting according to the new European Solvency II directives. The EU-based subsidiaries of the Swiss reinsurer are already prepared for the new reporting regime, which comes into force on January 1, 2016; accordingly, Swiss Re is considered a forerunner in compliant regulatory reporting. ABACUS/Solvency II will be used in all business units of Swiss Re that are required to report in accordance with Solvency II regulation.
ABACUS/Solvency II supports Swiss Re in the collection, validation and processing of data in the context of regulatory reporting under Solvency II. As a standardized solution, it offers a process flow aligned to the specific requirements of Solvency II. For insurers, this helps reduce software development and deployment costs as well as associated risks.
Continue reading Using a BearingPoint Solution, Swiss Re is already prepared for Solvency II reporting
Research and Markets (http://www.researchandmarkets.com/research/9p55fx/2020_foresight) has announced the addition of the “2020 Foresight Report: Assessing Solvency II – Challenges and Opportunities for the Insurance Industry” report to their offering.
Solvency II requires insurers to address all the foreseeable risks that may affect their business structure. However, the shift from Solvency I to Solvency II is not only about capital requirements; rather it is an evolutionary process that requires a change in the behavior of the insurance industry. These regulations will have a mixed impact on key insurance sections in the short run, with life and non-life insurance receiving most of the negative shock and reinsurance businesses receiving a boost.
Solvency II norms will also put tremendous pressure on current resources of insurance firms and will escalate their costs, however, carefully implementing these norms will unlock several opportunities that can be exploited upon to increase profitability.
Continue reading Research and Markets: 2020 Foresight Report: Assessing Solvency II – Challenges and Opportunities for the Insurance Industry
THE HAGUE, September 2, 2013 /PRNewswire via COMTEX/ — On August 29, 2013, De Nederlandsche Bank (DNB) announced that it maintains the current framework for the calculation of the Solvency 1 ratio in the Netherlands. This implies that insurers can choose either the DNB swap curve or the ECB AAA curve, the latter being the curve Aegon used for the calculation of the IGD (Insurance Group Directive) solvency ratio for Aegon the Netherlands.
On July 12, 2013, Fitch downgraded France from AAA to AA+, resulting in the removal of France from the ECB AAA curve and an adverse impact on the IGD solvency ratio of Aegon the Netherlands. Today, Aegon announces its intention to move to the DNB swap curve and to incorporate the Ultimate Forward Rate into its internal capital management policy.
On this new basis, the pro forma IGD solvency ratio for Aegon the Netherlands excluding banking activities per June 30, 2013, amounted to approximately 245%. The continued strong solvency ratio is evidence of Aegon’s commitment to maintaining solid capital buffers within each of its operating companies.
Continue reading Aegon Intends to Move to Swap Curve for Solvency Calculation in the Netherlands
NEW YORK–(BUSINESS WIRE)–July 02, 2013–
SimCorp, a leading provider of investment management solutions and services for the global financial services industry, today announced that one of Scandinavia’s largest asset managers, Swedish domiciled Swedbank Robur, is in operation with the SimCorp Dimension Solvency II solution.
The solution enables calculation of the Solvency Capital Requirement under Pillar 1, plus authority reporting, public disclosure and risk reporting under Pillar 3 of the Solvency II directive.
Already operating with SimCorp Dimension as its core investment management platform, SimCorp’s Solvency II solution was the natural choice for Swedbank Robur when the fund manager was faced with a specific demand from one of its clients.
“Our strategy is to maximize the utilization of SimCorp Dimension by having the system support as many standard business processes as possible. We now benefit from a Solvency II solution which is fully integrated with the rest of our system.
Continue reading Swedbank Robur Goes Live with SimCorp’s Solvency II Solution