Solvency II
WHAT IS THIS? Europe’s Solvency II directive came into effect in 2016, putting risk at the heart of a harmonised prudential framework for insurance firms. Similar in outline to the banking industry’s Basel standards, Pillar 1 sets out quantitative requirements; Pillar 2 tackles risk management and governance; Pillar 3 addresses transparency, reporting and public disclosure.
Better together: insurers hear case for op risk unity
European insurers are seeking common ground in the modelling of operational risk, hoping to reach the kind of consensus that has eluded their bank peers
PRA view on sovereign risk hedging too simplistic, say experts
UK regulator failing to consider complexities of risk free rate
‘Fixed is fixed’ – DNB stands firm on matching adjustment
Dutch regulator unmoved on mortgages and group pensions
UK life firms rethink forex hedging after PRA note
A note from the UK regulator on the Solvency II matching adjustment shuts the door on firms using rolling forward contracts to hedge forex risk. Rob Mannix reports on a shock that leaves some insurers with just months in which to overhaul hedging…
How to assess standard formula appropriateness
In the second of two Risk.net articles on how firms must show the Solvency II standard formula fits their business, Matt Cocke, Andrew Kay, Phil Simpson and Fred Vosvenieks, consultant actuaries at Milliman, discuss the areas where extra detail might be…
Rekindled affection: transitional measures spur equity rethink
Big capital charges had led to expectations that firms’ equity holdings would only shrink as European regulation approaches. Callum Tanner finds out that might not necessarily be the case
Standard formula: how different is too different?
Insurers choosing the Solvency II standard formula must demonstrate that doing so is appropriate. Precisely what ‘appropriate’ means, however, remains to be determined. Clive Davidson reports
Matching adjustment: PRA note clarifies and criticises equally
UK regulator sets out cashflow needs, but restates old concerns
‘Unpleasant surprise’ casts shadow over SII adjustments
Eiopa's calculations show an increase in the fundamental spread
Q&A: Aviva on op risk management, modelling, and conduct
The head of operational risk at the insurance company and chairman of Operational Risk Consortium (Oric) advocates moving away from a historical focus on worst-case scenarios and analysing instead a range of possible outcomes, alongside an emphasis on…
Capital charges no obstacle to infra investment – Montalvo
Poor risk-return the real barrier to insurers becoming more active, says senior regulator
Eurozone insurers eye CLNs as ECB easing hits bond yields
With the ECB’s quantitative easing programme driving yields on eurozone government bonds to record lows, French insurers have begun to explore the possibility of using hybrid credit and equity-linked notes as a way of bolstering returns
PRA letter on equity release leaves insurers puzzled
Internal structures allowed, but firms pushed towards internal models
Life in the Solvency II spotlight
There is a sense analysts will want to look beyond Solvency II's transitional measures to understand firms' 'true' capital position. Mutuals might enjoy more flexibility, away from the scrutiny of the markets.
The tensions behind Hong Kong's RBC compromise
With more than 150 insurers in the territory, from the largest multinationals to small local firms, Hong Kong has its work cut out to craft a solvency regime that keeps everyone happy
DNB takes firm line on matching adjustment repacks
Structuring of assets must remove residual prepayment risk
Commission hopes to cut infrastructure charges before 2016
Aggressive timetable outlined for reassessment of infrastructure capital charges
Solvency II actuarial role lacks clarity, say critics
Regulatory changes in Europe recognise the importance of actuarial science but leave the role of actuaries themselves less clear. The result could be more expense and less consistency, say critics
Clash of rules threatens to split Swedish insurers
Occupational pension insurers in Sweden have operated under an amalgam of European pensions and insurance rules, but Solvency II means that can no longer be the case. Firms must choose to be either a pension specialist or an insurance company, or split…
In limbo: insurers await PRA views on matching adjustment
The list of questions gets longer, and the time left for answers gets shorter. The UK industry can only wait as regulators prepare a final position on details of the Solvency II matching adjustment.
Bottom of the class: Eiopa stress-test underperformers compared
Insurance Risk spoke to insurers and supervisors in four of the countries to fare badly in Eiopa's recent stress tests to explore how they are responding to the pressures that the tests reveal. Louie Woodall reports on the similarities and differences in…
Eiopa Insurance Stress Test – Should alarm bells be ringing?
The European Insurance and Occupational Pensions Authority’s (Eiopa) disclosure of the results of its stress-test analysis, Eiopa Insurance Stress Test 2014, provides an insightful look at the key solvency positions and asset-liability mismatches of…
Paul Stanworth, L&G, on liability-matching 'fringe' assets
In an interview with Risk.net, Paul Stanworth explains how L&G is planning to structure investments in future to create assets that match its annuity book
Eiopa cuts matching adjustment risk margin
New guidelines clarify that market risk need not be included in projected SCR for long-term guarantee and transitional portfolios