Click here to close now.

Welcome!

News Feed Item

Nearly 80% of European insurers are on track to implement Solvency II by 1 Jan 2016

- Reporting requirements (Pillar 3) still represent a major challenge

LONDON, April 24, 2014 /PRNewswire/ -- Nearly 80% of European insurers expect to meet Solvency II requirements before January 2016, according to EY's European Solvency II Survey 2014. Overall, Dutch, UK and Nordic insurers are the best prepared, while French, German, Greek and East European (CEE) insurers are less confident.

Building a better working world logo.

The survey of 170 insurance companies, conducted in the Autumn of 2013, is an update of EY's 2012 pan-European survey and spans 20 countries including Europe's largest insurance markets. The findings reveal a consistently high state of readiness to implement the Pillar 1 balance sheet and fulfill most of Pillar 2, systems of governance, but Pillar 3, the reporting requirements, still presents a major challenge.

Martin Bradley, EY's Global Insurance Risk and Regulation Leader, says:

"Postponing the Solvency II regulatory deadline to 2016 has bolstered insurer confidence that they can meet the requirements in the time frame. However, as companies become more realistic about their implementation readiness, it is clear that some are less prepared than they had expected - many simply delayed their plans by at least one year, which might cause them issues now. While insurers are sending a strong message that they are seeking to improve their risk management effectiveness, they have a long way to go in terms of reporting, data and IT readiness."

Generally well prepared for Pillar 1; more work needed for Pillar 2

Insurance companies appear to be generally well prepared on all aspects of Pillar 1, with French, Dutch and Italian companies approaching compliance and Greek, Portuguese and Central Eastern European insurers showing a lower level of readiness. However, nearly 85% of respondents see room for improvement in the effectiveness and/or efficiency in meeting Pillar 2 requirements.

Martin says: "Insurers know that they need to tackle embedding risk culture at the front line more effectively. The top four improvements identified by insurers as delivering improved risk management effectiveness all related to interface with the front line, but these changes were also ranked as being the hardest to achieve."

For another key element of Solvency II, the Own Risk and Solvency Assessment (ORSA), there is a significant spread in readiness from lowest to highest by country. The Netherlands, Nordics and UK are more prepared, with Greece, Portugal and CEE less prepared.

Most companies have registered little progress in Pillar 3: significant work ahead

Almost 76% of respondents say they have yet to meet most or all Solvency II reporting requirements (only a marginal improvement compared to 80% in 2012).  Martin says: "The level of implementation readiness has made little progress since 2012. Uncertainty in implementation and timing delays may explain the lack of progress but it is now critical to accelerate these projects in 2014. Given the current status, the reality for many is that the 2015 transitional reporting will need to be done largely on a manual basis."

A long road to data and IT readiness

Data and systems readiness for Pillar 3 continues to lag behind Pillars 1 and 2. Only 25% of insurers have selected or designed a system to meet Pillar 3 requirements, and 66% of respondents note that data and systems are not designed to support ORSA assessments beyond the normal reporting cycle.

Jan Leiding, Partner in  Financial Services, Europe, Middle East, India and Africa at EY, says:

 "Not surprisingly, the decision to freeze or place programs into 'business as usual' means that only limited progress has been made in data and IT across all pillars in the last 12 months. Rapid gap assessments, prioritization and strong project leadership are needed to meet deadlines."

Two-thirds of internal model users expect approval at the start of Solvency II

Given the two-year delay in Solvency II implementation, insurers appear more confident in the approval of their models for day 1 use; 67% of the companies surveyed believe they will be ready. This reflects the extra time they have had to finalize their programs.

As a general trend, the proportion of insurers planning to use a (partial) internal model has dropped since our previous survey. However, partial internal models have shown the most noticeable reduction, and companies adopting full internal models are more likely to be continuing with their plans.

Better support needed from the regulators

While the overall frequency of interaction with regulatory bodies is considered largely adequate, insurers expect more in terms of support in the interpretation of regulatory requirements (79% are not satisfied) and in terms of the amount and quality of feedback on company-specific implementation (75% are not satisfied). This might reflect the fact that supervisors are understaffed as they cope with the new regulation. In addition, 61% of the surveyed insurers are not completely satisfied with the size of their supervisory teams.

Find a copy of the full report at www.ey.com/insurance.

About EY's Global Insurance Risk and Regulation Group

Our Global Insurance Risk and Regulation group operates in all of the main financial services markets around the world focusing on topics of evolving prudential regulation, risk transformation, recovery and resolution planning and capital optimization. For more information please see our website.

About EY

EY is a global leader in assurance, tax, transaction and advisory services. The insights and quality services we deliver help build trust and confidence in the capital markets and in economies the world over. We develop outstanding leaders who team to deliver on our promises to all of our stakeholders. In so doing, we play a critical role in building a better working world for our people, for our clients and for our communities.

EY refers to the global organization, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients. For more information about our organization, please visit ey.com.

This news release has been issued by EYGM Limited, a member of the global EY organization that also does not provide any services to clients.

Logo - http://photos.prnewswire.com/prnh/20130701/NY40565LOGO-b

SOURCE EY

More Stories By PR Newswire

Copyright © 2007 PR Newswire. All rights reserved. Republication or redistribution of PRNewswire content is expressly prohibited without the prior written consent of PRNewswire. PRNewswire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

Latest Stories
Overgrown applications have given way to modular applications, driven by the need to break larger problems into smaller problems. Similarly large monolithic development processes have been forced to be broken into smaller agile development cycles. Looking at trends in software development, microservices architectures meet the same demands. Additional benefits of microservices architectures are compartmentalization and a limited impact of service failure versus a complete software malfunction. ...
"We help to transform an organization and their operations and make them more efficient, more agile, and more nimble to move into the cloud or to move between cloud providers and create an agnostic tool set," noted Jeremy Steinert, DevOps Services Practice Lead at WSM International, in this SYS-CON.tv interview at @DevOpsSummit, held June 9-11, 2015, at the Javits Center in New York City.
The basic integration architecture, as defined by ESBs, hasn’t changed for more than a decade. Most cloud integration providers still rely on an ESB architecture and their proprietary connectors. As a result, enterprise integration projects suffer from constraints of availability and reliability of these connectors that are not re-usable across other integration vendors. However, the rapid adoption of APIs and almost ubiquitous availability of APIs amongst most SaaS and Cloud applications are ra...
Agile, which started in the development organization, has gradually expanded into other areas downstream - namely IT and Operations. Teams – then teams of teams – have streamlined processes, improved feedback loops and driven a much faster pace into IT departments which have had profound effects on the entire organization. In his session at DevOps Summit, Anders Wallgren, Chief Technology Officer of Electric Cloud, will discuss how DevOps and Continuous Delivery have emerged to help connect dev...
"What Dyn is able to do with our Internet performance and our Internet intelligence is give companies visibility into what is actually going on in that cloud," noted Corey Hamilton, Product Marketing Manager at Dyn, in this SYS-CON.tv interview at 16th Cloud Expo, held June 9-11, 2015, at the Javits Center in New York City.
The Internet of Things is not only adding billions of sensors and billions of terabytes to the Internet. It is also forcing a fundamental change in the way we envision Information Technology. For the first time, more data is being created by devices at the edge of the Internet rather than from centralized systems. What does this mean for today's IT professional? In this Power Panel at @ThingsExpo, moderated by Conference Chair Roger Strukhoff, panelists addressed this very serious issue of pro...
Internet of Things is moving from being a hype to a reality. Experts estimate that internet connected cars will grow to 152 million, while over 100 million internet connected wireless light bulbs and lamps will be operational by 2020. These and many other intriguing statistics highlight the importance of Internet powered devices and how market penetration is going to multiply many times over in the next few years.
Manufacturing has widely adopted standardized and automated processes to create designs, build them, and maintain them through their life cycle. However, many modern manufacturing systems go beyond mechanized workflows to introduce empowered workers, flexible collaboration, and rapid iteration. Such behaviors also characterize open source software development and are at the heart of DevOps culture, processes, and tooling.
Today air travel is a minefield of delays, hassles and customer disappointment. Airlines struggle to revitalize the experience. GE and M2Mi will demonstrate practical examples of how IoT solutions are helping airlines bring back personalization, reduce trip time and improve reliability. In their session at @ThingsExpo, Shyam Varan Nath, Principal Architect with GE, and Dr. Sarah Cooper, M2Mi’s VP Business Development and Engineering, will explore the IoT cloud-based platform technologies drivi...
Containers have changed the mind of IT in DevOps. They enable developers to work with dev, test, stage and production environments identically. Containers provide the right abstraction for microservices and many cloud platforms have integrated them into deployment pipelines. DevOps and Containers together help companies to achieve their business goals faster and more effectively. In his session at DevOps Summit, Ruslan Synytsky, CEO and Co-founder of Jelastic, reviewed the current landscape of...
Live Webinar with 451 Research Analyst Peter Christy. Join us on Wednesday July 22, 2015, at 10 am PT / 1 pm ET In a world where users are on the Internet and the applications are in the cloud, how do you maintain your historic SLA with your users? Peter Christy, Research Director, Networks at 451 Research, will discuss this new network paradigm, one in which there is no LAN and no WAN, and discuss what users and network administrators gain and give up when migrating to the agile world of clo...
SYS-CON Events announced today that JFrog, maker of Artifactory, the popular Binary Repository Manager, will exhibit at SYS-CON's @DevOpsSummit Silicon Valley, which will take place on November 3–5, 2015, at the Santa Clara Convention Center in Santa Clara, CA. Based in California, Israel and France, founded by longtime field-experts, JFrog, creator of Artifactory and Bintray, has provided the market with the first Binary Repository solution and a software distribution social platform.
"We got started as search consultants. On the services side of the business we have help organizations save time and save money when they hit issues that everyone more or less hits when their data grows," noted Otis Gospodnetić, Founder of Sematext, in this SYS-CON.tv interview at @DevOpsSummit, held June 9-11, 2015, at the Javits Center in New York City.
Internet of Things (IoT) will be a hybrid ecosystem of diverse devices and sensors collaborating with operational and enterprise systems to create the next big application. In their session at @ThingsExpo, Bramh Gupta, founder and CEO of robomq.io, and Fred Yatzeck, principal architect leading product development at robomq.io, discussed how choosing the right middleware and integration strategy from the get-go will enable IoT solution developers to adapt and grow with the industry, while at th...
Containers are revolutionizing the way we deploy and maintain our infrastructures, but monitoring and troubleshooting in a containerized environment can still be painful and impractical. Understanding even basic resource usage is difficult – let alone tracking network connections or malicious activity. In his session at DevOps Summit, Gianluca Borello, Sr. Software Engineer at Sysdig, will cover the current state of the art for container monitoring and visibility, including pros / cons and liv...