This isn’t typically on topic for Artemis however Solvency II is a big issue for the market and being prepared and compliant with the new regulations is going to be on a lot of Artemis’ visitors minds.
Northdoor, the IT consultancy, has undertaken a survey to gauge insurers feelings about the impending Solvency II regulation and how preparations for the new regulatory regime are going.
- 26% think the industry isn’t on track with Solvency II compliance – 45% aren’t sure
- 71% think Solvency II implementation will help their business model
- 35% of respondents say their company has spent less than £250k so far on Solvency II – 13% said they’ve spent between £250k-£500k
- 29% say they expect to spend a further £250k-£500k on compliance – 6% expect to spend a further £1m or more!
That gives a worrying perception of the readiness of insurers although it is encouraging that so many feel that Solvency II will help their business model.
However, the really interesting piece of the press release says that the survey of 38 representatives from insurers found that nearly two-thirds (58%) believe that Solvency II represents a bigger risk than hurricanes.
Anyone who’s been involved in the insurance or reinsurance industry for some time will know how nervous insurers get when hurricane season approaches, particularly those with exposure in Florida and U.S. Gulf Coast areas. For insurers to be more worried about Solvency II than hurricanes really shows the impact it is having on the industry. We do wonder if some of those insurers might have changed their minds about what was a bigger risk had a Category 4 storm made a direct hit on Florida this year?
Solvency II demonstrates the importance of having the right people in your organisation to embrace and roll-out change across your business. If you have the wrong people then Solvency II compliance will be an uphill struggle.