Tag Archives: Britain’s Prudential Regulation Authority (PRA)

EDHEC: Solvency II Prudential Regulation – An Impediment To The Return Of Insurers To The Property Market

In a position paper entitled “The Impact of Solvency II Prudential Regulation on Property Financing in the Insurance Industry”, the Financial Analysis and Accounting Research Centre and the Economics Research Centre at EDHEC Business School conduct a critical analysis of the calibration of property risk under Solvency II prudential regulation.

This study, conducted in partnership with the French Ministry for Housing, tests the robustness of the calculations for two key elements within the Solvency II calibration – the size of the property shock (Value-at-Risk) and the correlation of real estate with other asset classes.

The challenge of this analysis is sizeable given that the European insurance sector currently has €10 trillion worth of outstanding investments. 

Continue Reading “EDHEC: Solvency II Prudential Regulation – An Impediment To The Return Of Insurers To The Property Market” at Mondo Visione

Quitting Britain back on Prudential’s agenda as new capital rules loom

The Prudential, Britain’s biggest insurer, has dusted off plans to uproot after 167 years and move abroad to combat incoming European Union rules on capital buffers for insurance companies.

An internal report by theDWS 2015 Photos-72small group on how to deal with the rules has proposed splitting its British business from its Asian and American operations.

While no decision has been taken by the company, led by US-born chief executive Mike Wells, this would open the door to shifting the company’s domicile to Hong Kong or Singapore from London.

British insurance companies are scrambling to comply with the new EU capital rules, known as Solvency II, which come into force in January.

Splitting the group into UK and non-UK divisions is just one option under consideration by the Prudential. Management are also thought to be considering riding out the new capital rules and keeping the group together.

Continue Reading “Quitting Britain back on the Prudential’s agenda as new capital rules loom” at Independent News

L&G still paying price for dividend cut during crisis, chief says

Legal & General is still paying the price for cutting its dividend six years ago, its chief executive said on Wednesday, even after the life assurance and pensions group boosted its payout by a fifth.intro

Nigel Wilson said investors had “long memories” about L&G, which slashed its dividend by half during the depths of the crisis when its shares dropped as low as 23p.

The company has since recovered to become Britain’s third-largest insurer by market capitalisation. Shares rose 2.6 per cent on Wednesday to 270.24p after a bigger-than-expected 19 per cent rise in its interim dividend.

Continue Reading “L&G still paying price for dividend cut during crisis, chief says” at Financial Times

Reporting Templates and Calculation made Simpler under Solvency II, says PRA

Under the final rules implementing the Solvency II directive, the Prudential Regulation Authority (PRA) has simplified matters in two areas.id-0009345512

Paul Fisher, executive director at the PRA, said reporting templates have been amended to improve clarity and calculations on technical provisions have also been made simpler.

Speaking in a webcast published by the Association of British Insurers (ABI), Fisher said: “What we have done is to use our discretion is to try to make things simpler where we can. We’ve done it in a couple of places, particularly around simplifying some of the reporting templates, which the firms have found a little complicated.

Continue Reading “Reporting Templates and Calculation made Simpler under Solvency II, says PRA” at The Actuary News

Bank of England says will apply new insurance rules ‘proportionately’

Reuters) – The Bank of England said on Friday that it would apply new European Union insurance regulations “proportionately”, following industry fears that the central bank might seek to add extra rules for companies based Bank-Of-England_1218220cin Britain.

The so-called Solvency II rules, which take effect in 2016, aim to ensure that insurers such as Britain’s Prudential (PRU.L) and Aviva (AV.L) hold enough capital to honour policyholder commitments even when markets turn sour.

In a statement on Friday about how he intended to police the rules, BoE Deputy Governor Andrew Bailey said the British insurance industry already managed risks in the way the rules intended, unlike elsewhere in Europe.

Continue Reading “Bank of England says will apply new insurance rules ‘proportionately'” at Reuters News

UK to Risk EU Court Challenge Over Tougher Insurance Rules

Andrew Bailey, chief executive of Britain’s Prudential Regulation Authority (PRA), said EU rules known as Solvency II, due to come into effect in 2016 at the earliest, would not be comprehensive enough.court_gavel_money

“To mitigate this risk, we plan to use ‘early warning indicators’ in our supervisory work,” Bailey said in a letter to Andrew Tyrie, chairman of parliament’s Treasury Committee.

The PRA wants to avoid a repeat of the Equitable Life scandal, which saw the world’s oldest life assurer nearly collapse after making promises to policyholders that it could not keep.

Continue Reading “UK to Risk EU Court Challenge Over Tougher Insurance Rules” at Reuters News