2020 Foresight Report: Assessing Solvency II - Challenges and Opportunities for the Insurance Industry

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Dec 17, 2013, 10:01 ET

NEW YORK, Dec. 17, 2013 /PRNewswire/ -- Reportlinker.com announces that a new market research report is available in its catalogue:

2020 Foresight Report: Assessing Solvency II - Challenges and Opportunities for the Insurance Industry

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Synopsis

The report provides market analysis, information and insights into the upcoming Solvency II regulations for the insurance industry in Europe, including:
• Comprehensive analysis of the Solvency II framework including its key pillars and regulatory evolution
• Analysis of the implications of Solvency II including impact assessment on various segments of the insurance industry and products
• Comprehensive analysis of risks and challenges for different assets
• Detailed analysis of the opportunities along with some of the key recommendations
• Assessment of the readiness of organizations in different countries in Europe and the regional risks and challenges
• Regional analysis of key regions outside Europe for assessing the impact of Solvency II regulations on existing regulations in those regions

Summary

Solvency II requires insurers to address all the foreseeable risks that may affect their business structure. However, the shift from Solvency I to Solvency II is not only about capital requirements; rather it is an evolutionary process that requires a change in the behavior of the insurance industry. These regulations will have a mixed impact on key insurance sections in the short run, with life and non-life insurance receiving most of the negative shock and reinsurance businesses receiving a boost. Solvency II norms will also put tremendous pressure on current resources of insurance firms and will escalate their costs, however, carefully implementing these norms will unlock several opportunities that can be exploited upon to increase profitability. Moreover, it will reduce volatility in the insurance sector and offer a business environment that is encouraging for operations in the long run.

Scope

• This report provides comprehensive analysis of Solvency II regulations which will impact the financial and capital structure of the insurance industry
• It studies the proposed Solvency II directives by key pillars and explains their objectives
• It provides detailed analysis of the challenges and overall impact that Solvency II will have on the financial services industry
• It provides comparative study of Solvency II regulations with Solvency I and Basel II norms
• It provides analysis of the opportunities for insurance firms under the new regulations

Reasons To Buy

• Make strategic business decisions using this detailed assessment of the key challenges and opportunities
• Understand directives of the new regulations and necessary changes required in the current business structure of a firm, in order to be prepared for smooth implementation
• Assess the adoption of Solvency II in different countries
• Find out how the key segments of the insurance industry will be impacted in the short run and the long run
• Understand the impact on key asset classes due to the change in regulations

Key Highlights

• Solvency II regulations are expected to replace Solvency I regulations by January 2014, which will overhaul the structure of the insurance industry in Europe and change the change the way the financial soundness of an insurance firm is perceived.
• Pillar I of Solvency II regulation addresses solvency capital requirements of an insurance firm as well as capital charges for all other quantifiable risks.
• Pillar II is aimed at setting a higher standard of risk management and corporate governance within a firm's business structure with central focus on Own Risk and Solvency Assessment (ORSA).
• Pillar III focuses on public and supervisory disclosures which includes the Solvency and Financial Condition Report (SFCR), meant for the general public and the Regulatory Supervisory Report (RSR), a private report meant for national regulators.
• The quantitative surveys conducted by EIOPA suggests that most insurance firms are not prepared for full adoption of Solvency II regulations at this current juncture.

Table of Contents

1 Executive Summary
2 Solvency II Framework: Assessment of Key Pillars and Timelines
2.1 Pillar I: Capital Adequacy
2.2 Pillar II: Supervision
2.3 Pillar III: Disclosure
2.4 Regulatory Evolution
2.4.1 Solvency I vs. Solvency II
2.4.2 Basel II vs. Solvency II
3 Analysis of Business and Operational Implications
3.1 Impact on Key Functional and Operational Elements
3.1.1 Impact on insurance product
3.2 Impact on Insurance Segments
3.2.1 Impact on life insurance segment
3.2.2 Impact on general or non-life insurance segment
3.3 Impact on Reinsurance
4 Solvency II Risk Assessment and Challenges
4.1 Analysis by Asset Class
4.1.1 Equities
4.1.2 Property
4.1.3 Derivatives
4.1.4 Bonds
4.1.5 Alternative assets
4.2 Analysis by Solvency II Pillars
4.2.1 Pillar I – capital adequacy
4.2.2 Pillar II – systems of governance
4.2.3 Pillar III – supervisory reporting and public disclosure
4.3 Analysis of Banks
5 Analysis of Opportunities and Recommendations
5.1 Market Opportunities
5.1.1 Operational and functional opportunities
5.1.2 Mergers and acquisitions
5.2 Recommended Actions
6 Europe: Assessment of Solvency II Readiness and Risks
6.1 Country Readiness Status by Functional and Operational Elements
6.2 Company Benchmarking by Solvency Capital Margin
6.3 Regional Risk and Challenges
7 Regional Analysis: Assessment of Solvency II Readiness and Impact on Business
7.1 Americas
7.1.1 Current status of solvency regulations
7.1.2 Country readiness status by functional and operational elements
7.2 Asia-Pacific
7.2.1 Current status of solvency regulations in Asia
7.2.2 Country readiness status by functional and operational elements
8 Appendix
8.1 Methodology
8.2 Definitions
8.3 Contact Us
8.4 About Timetric
8.4.1 Our approach
8.5 Services
8.6 Disclaimer

List of Tables

Table 1: Components of Pillar I
Table 2: Capital Charges for Equity Investment
Table 3: Key Definitions

List of Figures

Figure 1: Solvency II and the Three Pillars
Figure 2: The Lamfalussy Process for Solvency II Regulation in the EU
Figure 3: Implementation Timelines of Solvency II
Figure 4: The Evolution Process of Solvency II
Figure 5: Impact of Solvency Requirement on Company's Balance Sheet
Figure 6: Basel II vs. Solvency II Pillars
Figure 7: Impact of Solvency II on Insurance Business Models
Figure 8: Impact of Solvency II on Key Segments
Figure 9: Impact of Solvency II on Life Insurance Products
Figure 10: Impact of Solvency II on Reinsurance
Figure 11: Impact of Solvency II on Assets
Figure 12: Bond Yield vs. Capital Charge
Figure 13: Expected Capital Charges Under Solvency II for Different Asset Classes
Figure 14: Pillar I Key Components and the Potential Challenges
Figure 15: Pillar II Key Components and Potential Challenges
Figure 16: Pillar III Key Components and Potential Challenges
Figure 17: Solvency I vs. Solvency II from the Point of Bancassurers
Figure 18: Possible Options for Bancassurers Under Solvency II
Figure 19: M&A and Insurance Firms
Figure 20: Key Recommendations
Figure 21: Solvency II Readiness Status by Pillar
Figure 22: Solvency II Readiness by Key EU Countries
Figure 23: European 20 Leading Insurance Companies – GWP vs. Solvency Margin
Figure 24: Solvency Margins of Europe's 20 Leading Insurance Companies (%), 2011
Figure 25: Snapshot of Americas Solvency Regimes
Figure 26: America's Insurance Market Readiness for Solvency II Type of Regime
Figure 27: Regulatory Implementation Timeline – Mexico
Figure 28: Asia's Insurance Market Readiness for Solvency II Framework
Figure 29: Asia's Solvency Regimes
Figure 30: Comparison of Solvency II Regulations with Chinese Regulations
Figure 31: Comparison of RBC Stresses and the QIS5 Stresses