• Register
Return to: Home > News > Regulation > Insurance industry hails Solvency II cost and complexity

Insurance industry hails Solvency II cost and complexity

By Steffen Müller

The insurance industry fears high cost and distraction from the day-to-day business through the implementation of the European Commission's Solvency II directive, a Grand Thornton UK survey found.

The Solvency II Directive 2009/138/EC aims to codify and harmonise insurance regulation in the European Union (EU), primarily concerning the amount of capital that EU insurance companies must hold to reduce the risk of insolvency.

According to Grant Thornton UK's survey, more than three quarter of the respondents consider the costs of Solvency II to be disproportionate and to be using up valuable resources that could be far better utilised in other areas.

Only 6% of the interviewees believe the costs of Solvency II are 'reasonable'.

However, acceptance towards Solvency II as a way to run business is growing, from one in four in a survey conducted in 2012 to one
in three in the recent report:

"Increasingly, the sector is begrudgingly accepting Solvency II as a 'necessary evil', and recognising that it will bring some benefits", Grant Thornton UK head of actuarial and risk Simon Sheaf said.

Accordingly, the vast majority (94%) of respondents agreed with the principles of Solvency II, but 74% still believe that the principles have been ruined by the implementation.

"The industry has largely been in favour of the principles behind Solvency II for some time. However, the opacity around implementation deadlines and precise requirements are continuing to make the pill-swallowing an even more bitter exercise," Sheaf said.

"The sector still feels as though it's being unnecessarily burdened by the complexities of Solvency II," he added.

The Solvency II directive is scheduled to be effective on 1 January 2016. With 76%, more than three quarters of the survey's respondents expecting the implementation date to happen as scheduled and almost all (98%) suggesting their organisation would be prepared for the implementation at this date.

Related link

Grant Thornton UK

Top Content

    Time pressure: Facing up to mental health

    In an ‘always on’ culture, it is becoming increasingly difficult to manage a healthy work-life balance. While companies are beginning to address this problem by introducing different support systems, Joe Pickard finds more could be done to ensure the wellbeing of the professions workforce.

    read more

    Venezuela: the race for the dollar

    With a new currency following hyperinflation, large sections of the population emigrating to neighbouring countries, an economy on the brink of collapse and no apparent solution coming from the government, Jonathan Minter finds a profession struggling to stay afloat in Venezuela.

    read more

    Brazil: transparency and control

    Brazilian accountants have an optimistic view of the impact of more-regular reporting and the implications of audit controversies for the profession. Paul Golden reports.

    read more

    Argentina: looking for a clearer view

    The Argentine accounting profession continues to grapple with the impacts of a weak economy and a culture of financial corruption. Paul Golden takes a closer look.

    read more

    Blockchain: adapting to disruptive tech

    In the relatively few years since digital currencies first began using blockchain technology, the array of potential applications has grown significantly – and continues to expand. Dan Balla, Matthew Schell and Dave Uhryniak from Crowe look at how it impacts accountancy.

    read more
Privacy Policy

We have updated our privacy policy. In the latest update it explains what cookies are and how we use them on our site. To learn more about cookies and their benefits, please view our privacy policy. Please be aware that parts of this site will not function correctly if you disable cookies. By continuing to use this site, you consent to our use of cookies in accordance with our privacy policy unless you have disabled them.