Creditworthiness of European rated insurers is unlikely to be affected when they will have to reveal, for the first time starting in May 2017, the extent to which their Solvency II ratios are enhanced by various measures, including transitionals and long-term guarantee measures, says Moody’s Investors Service in a report published today. The disclosures are part of insurers’ compliance reporting under the new capital regime.
Moody’s report, “Insurers — Europe: New Solvency II disclosure to provide insight, but unlikely to change our credit view,” is available on www.moodys.com. Moody’s subscribers can access this report via the link provided at the end of this press release. The rating agency’s report is an update to the markets and does not constitute a rating action.
Continued Reading “Moody’s: Solvency II regulatory disclosures unlikely to affect European insurers’ credit quality” at EconoTimes
Solvency II is finally upon us and much has been said about how the pressures will ripple across insurers and their asset managers. But how can asset managers ensure that they are managing the data quality demands of Solvency II and meeting the high standards of their insurance clients?
For asset managers, this has presented well documented challenges, requiring them to deliver a variety of often complex asset and reference data in a consistent format and faster than they are used to.
Challenges include: collating data across multiple sources; the need for new data such as classifications, credit ratings, benchmark curves and new data taxonomies for securities instruments, such as CIC and NACE; providing underlying performance data for asset-backed instruments or instruments held within fund of funds for the fund look-through requirement of Solvency II.
In order to deliver the right depth of data at the right time, the underlying foundation of an asset manager’s data management process needs to be solid.
Continue Reading “Solvency II – making demands on your data quality process” at Bob’s Guide
First of all, Pillar I requirements have prompted (re)insurance companies to rethink their overall capital positions. And that’s been a good thing.
While most companies across Europe have been using internal capital models and various capital measures for many years mostly for internal capital management purposes, the introduction of a new, risk-based capital regime has led to many firms revisiting and ultimately reconsidering the risks they are exposed to across both assets and liabilities.
However, there is the challenge of comparability. A rating agency’s opinion of a (re)insurers risk-based capital adequacy is a major input into the overall rating, if not one of the most important inputs for a large number of rated entities.
Continue Reading “What do the Credit Rating Agencies think of Solvency II?” at The Actuarial Post
Insurance companies are well placed to fill a $500bn annual gap between infrastructure investment needs and the lending available from traditional sources such as banks, according to research published by S&P RatingsDirect.
Credit analyst Marco Sindaco in London notes in his latest analysis that there is an estimate of $3.4trn in annual infrastructure investment needs through 2030, and it is to these needs that there is an ongoing gap in funding.
However, insurance companies with long term liabilities can see benefits in ties to infrastruture projects, which are long term in nature, and designed to provide broader economic benefits.
Continue Reading “Infrastructure S&P Delivers Verdict on Insurer Role in Infrastructure” at Investment Europe News
Solvency II has pushed up the price of corporate bonds, according to a study by AXA Investment Managers, creating a greater appetite for sovereigns and credit.
The upcoming Solvency II regulation has caused European insurers to shift their asset allocation to reflect asset class volatility and solvency capital requirements (SCR). Investment grade credit becomes the defensive asset of choice because of its lower volatility and acceptable SCR level.
This has resulted in a shift of some €500bn of their assets away from equities in favour of less volatile, short-term fixed income assets.
Continue Reading “Solvency II Boosts Appetite for Sovereigns and Credit, says AXA study” at Investment Europe News
Fitch Ratings says in a newly published report, that the proposed new Solvency II regulation for European insurance companies in respect of their exposure to securitisations could disincentivise insurance companies from investing in highly rated and historically strongly performing securitisations.
Fitch says that the new measures, set to come into force at the beginning of 2014, could lead to disproportionately high capital charges, and in the process, restrict funding opportunities for European banks.
Continue Reading “TEXT-Fitch:Solvency II to Have Negative Impact on Securitisation and Supply of Credit” at Reuters News