Financial Services Ireland

European Solvency II Survey 2014

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European Solvency II Survey 2014

How ready are you for Solvency II?

Our readiness survey was conducted in the autumn of 2013 and is an update of EY’s 2012 Pan-European survey. Research spans 20 countries, including Europe’s largest insurance markets. It includes participants from over 170 insurance companies.

Overall, the insurance industry is on track to implement Solvency II by 1 January 2016; however, a significant amount of work is needed between now and then to address preparedness across all three pillars. That said, nearly 80% of European insurers expect to meet Solvency II requirements before the deadline.  Dutch, UK and Nordic insurers are the best prepared, while French, German, Greek and East European (CEE) insurers are less confident.

The findings reveal a consistently high state of readiness to implement the Pillar 1 balance sheet and fulfil most of Pillar 2, but Pillar 3, the reporting requirements, still presents a major challenge.

Other key findings include:

  • There is a strong, consistent message that insurers are seeking to improve the effectiveness of their risk management, including many dimensions in culture, appetite, controls, people and systems.
  • Challenges of reporting and ensuring robust data and information technology (IT) remain very significant, and many companies have yet to sufficiently energise this part of their plans.
  • Preparedness for Pillar 3 remains relatively low and action is needed by companies to meet the requirements on time.
  • Achieving internal model approval remains a major challenge; there is only a slight reduction in the number of companies planning to take this route.
  • Many insurers are not satisfied with the level of support from their regulators in providing timely feedback on plans and interpretation of new requirements.
  • Automation of many risk management activities, particularly reporting, remains relatively low and, as companies develop their plans, we expect this will be an area of increasing focus.
  • Insurers are increasingly receiving requests for recovery and resolution planning.
  • Companies are beginning to invest significant effort in understanding how to manage their capital under Solvency II so that they are properly prepared for the new regime.

James Maher

Insurance, Sector Leader
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