Solvency II - How Towers Watson can help your company grasp the business opportunity 7 July 2011 Solvency II has already involved a significant effort on the part of most insurers to prepare for the implementation of the new regulation. This brochure highlights key aspects of Towers Watson's experience of working with clients throughout Europe across their whole Solvency II implementation programme.
Insights: Own Risk and Solvency Assessment (ORSA) 11 April 2011 Solvency II goes beyond defining the technical specifications to calculate the solvency capital requirement and this is no better demonstrated than in the need for companies to perform an Own Risk and Solvency Assessment (ORSA). In this document, we set out the requirements of the ORSA and what it means for companies.
e-Alert: Publication of 2011 EU-wide stress test specification for insurance sector 31 March 2011 The specification for the insurance sector 2011 EU-wide stress test was published on 23 March 2011. The aim of the exercise is to assess the resilience of the insurance sector to adverse conditions and the potential for systemic risk under stress.
e-Alert: EIOPA issues report on the fifth Quantitative Impact Study (QIS5) 31 March 2011 EIOPA issued its report on the fifth Quantitative Impact Study (QIS5) on the 14th March 2011. In tandem, a number of supervisors have or will be releasing reports focussing specifically on the main messages in the various participating countries.
press release: Towers Watson's Solvency II Outlook for 2011 11 January 2011 Preparation challenges for Solvency II costing billions of pounds are set to help make this the most significant year of reform ever faced by the insurance industry.
Insights: Measuring risk culture under Solvency II 23 December 2010 In this document we set out our solution to enable companies to make a quick start on measuring and improving risk culture and associated risk management, and discuss our experience of doing this in practice.
e-alert: Final QIS5 Specification 14 July 2010 The EU published the final technical specification for the fifth Quantitative Impact Study on 6 July 2010. There are a number of changes to the draft specification following consultations with the main stakeholders. These have lead to a further slight softening of requirements for the industry. However, most of the key issues remain.
e-alert: Public Hearing on Level 2 Implementing Measures 11 May 2010 The public hearing on the Level 2 implementing measures was held on 4 May 2010 in Brussels and a brief summary of the main points raised in the sessions are set out below.
e-alert: Draft QIS5 technical specification 20 April 2010 On 15 April, the European Commission (EC) released a draft technical specification for QIS5 and various calibration papers. Veteran Solvency II watchers will recognise the structure and much of the content from the Final Level 2 Advice from CEIOPS. However, the EC has made some substantial reductions to the quantum of some of the stress tests envisaged by CEIOPS.
e-alert: Lloyds Detailed Guidance Notes for Phase 2 of the Solvency II Dry Run Process 16 April 2010 On 1 April 2010, Lloyd’s issued its detailed guidance notes for Phase 2 of the Solvency II dry run process. These supplement Lloyd's November 2009 guidance notes and seek to give practical guidance to managing agents in respect of the dry run process and wider Solvency II preparations. The guidance notes consist of a detailed introduction, followed by 9 sections covering delivery Phases 2.1, 2.2 and 2.3.
e-alert: Lloyd’s dry run guidance, Phase 2.1 (due 1 June 2010) 14 April 2010 This section contains details of Lloyd’s best view of current requirements on governance. Solvency II brings new elements to the existing governance framework, including the internal audit function, risk management function and actuarial function, together with more general governance requirements.
e-alert: Lloyd’s dry run guidance, Phase 2.2 (due 1 August 2010) 14 April 2010 Much of the detail contained within Lloyd’s guidance for Phase 2.2 of the dry run is similar to CEIOPS’ final advice on internal models (former CP56); Lloyd’s stresses that all managing agents are expected to have a thorough understanding of CEIOPS’ advice.
e-alert: CEIOPS' final advice on the Level 2 Implementing Measures 14 April 2010 On 8 April 2010 CEIOPS delivered its final advice to the European Commission on the health SCR, non-life SCR and MCR calibrations. These areas were originally covered within the broader third wave of level 2 advice, but the final advice was delayed to enable CEIOPS to collect further data from Member States and to do further analysis.
e-alert: Lloyd’s dry run guidance, Phase 2.3 (due 1 November 2010) 14 April 2010 This section contains significant overlap with CEIOPS’ advice and the separate Lloyd’s guidance on Solvency II technical provisions. Solvency II will require major changes to technical provision reserving processes; managing agents need to be aware of all the key issues so that they can prepare for the many challenges of the new regime. The first test will be the compulsory QIS5 exercise during August – October 2010.
e-alert: Lloyd’s dry run guidance, Introduction and overview 14 April 2010 On 1 April 2010, Lloyd’s issued its detailed guidance notes on Phase 2 of the Solvency II dry run process which has been developed to supplement CEIOPS’ level 2 advice and FSA requirements with practical guidance to help managing agents meet the Solvency II requirements.
e-alert: Lloyd’s detailed guidance on Solvency II technical provisions 8 April 2010 On 31 March 2010, Lloyd’s issued its eagerly anticipated detailed guidance on technical provisions under Solvency II. This paper, which was reviewed by the LMA Solvency II working group, sets out Lloyd’s interpretation of CEIOPS level 2 advice on the valuation of reserves, identifies specific potential issues for Lloyd’s managing agents and suggests a number of practical solutions.
e-alert: Report of CEIOPS Task Force on the Illiquidity Premium 5 March 2010 On 17 November 2009, CEIOPS was asked by the European Commission to set up a task force to develop technical solutions on the illiquidity premium, as well as the potential use of swaps as the base risk free rate, and the method for the extrapolation of the yield curve at long durations.
e-alert: CEIOPS releases final advice on third wave of consultation papers 9 February 2010 On 29 January 2010, CEIOPS delivered its final advice to the European Commission on the vast majority of areas covered by the third wave of consultation papers for Solvency II Level 2 Implementing Measures.
e-alert: CP78 - CEIOPS' draft advice on the technical criteria for assessing 3rd country equivalence in relation to art. 172, 227 and 260 1 December 2009 On 30 November 2009 CEIOPS issued its draft advice on the technical criteria for assessing third country equivalence (to the Solvency II regime) in relation to three specific articles of the Solvency II directive. For each article the paper sets out the principles and objectives that a third country will have to meet in order to be considered equivalent and then lists out detailed indicators of equivalence. These indicators are linked to the relevant articles of the directive.
article: Summary of CEIOPS’ advice on Level 2 implementing measures 1 December 2009 Throughout 2009 the Committee of European Insurance and Occupational Pensions Supervisors (CEIOPS) issued draft formal advice on Solvency II Level 2 implementing measures for consultation. We have produced a short summary and analysis of each consultation paper released which we hope that you will find useful.
article: Searching for the unattainable? 1 December 2009 Solvency II not only demands masses of extra reporting from insurers to be produced in much shorter time periods, it also expects this to be much more rigorously controlled and documented. How are actuarial business processes and technology responding?
e-alert: CEIOPS releases final advice on first two rounds of consultation papers 12 November 2009 On 10 November 2009, CEIOPS delivered its final advice to the European Commission on the vast majority of areas covered by the first and second round of consultation papers for Solvency II Level 2 Implementing Measures. Consultation on the first two rounds took place from March to September 2009. The third wave of consultation papers was released on 2 November 2009, and so is not covered by this advice.
e-alert: CEIOPS third set of advice on Level 2 implementing measures 9 November 2009 On 2 November 2009 the Committee of European Insurance and Occupational Pensions Supervisors (CEIOPS) issued the third set of draft formal advice on Solvency II Level 2 implementing measures for consultation. We have produced a short summary and analysis of each consultation paper released which we hope that you will find useful.
article: Developing an Insurance Scenario Generator 3 November 2009 This involves generating risk drivers with a specific impact in insurance companies and then modelling their impact on different risks. Hannes Janse van Rensburg elaborates.
article: Rationalize your risk models and risk measures 9 October 2009 Insurers must reduce the number of risk models and risk measures which they use because they are often inconsistent with one another, says Mark Chaplin, global head of risk and value services.
article: Insurance insight - roadmap to Solvency II 5 October 2009 This edition takes stock of where a hypothetical insurance company might be in its preparation for Solvency II, and gives a possible roadmap (or implementation plan) for the work that lays ahead.
Article: Partial models pose challenges for CEIOPS 19 June 2009 Graham Fulcher comments on the postponement of the Committee of European Insurance and Occupational Pensions Supervisors (CEIOPS) consultation paper on partial internal models from the July-September consultation period to November-December.
article: The Actuarial Function 12 June 2009 Time is running out for actuaries to prepare for the whirlwind of changes swept in by the implementation of the Solvency II legislation, says Sanjiv Chandaria and Dean Swallow
article: Six Steps to Solvency II 12 June 2009 (Re)insurers will have to prove that their internal models are up to the task, explains Graham Fulcher.
article: The Solvency II factor 12 June 2009 Sanjiv Chandaria explains how the latest developments regarding the framework directive impact the run-off market.
e-Alert:FSA feedback statement on responses to DP08/04 6 May 2009 Today the FSA published a feedback statement summarising the responses to "DP08/04 Insurance Risk Management: The Path to Solvency II" and providing comment on them. The feedback statement follows the same structure as the DP and considers each of the questions raised in the DP in turn.
article: CEIOPS first set of advice on Level 2 implementing measures 1 April 2009 On 26 March 2009 the Committee of European Insurance and Occupational Pensions Supervisors (CEIOPS) issued the first set of draft formal advice on Solvency II Level 2 implementing measures for consultation.
eAlert: COREPER reach preliminary agreement on compromise Solvency II Framework Directive 27 March 2009 On 26 March 2009 the Permanent Representatives Committee of the Council of the European Union (COREPER) reached an informal agreement on the compromise Solvency II Framework Directive (the first of three main levels of legislation defining the Solvency II regime).
article: Insurance Day Special Report - Managing legacy business 24 February 2009 A brief illustration of the benefits of capital models to legacy organisations by Rob Collinson and Sanjiv Chandaria of the Non-Life Insurance team. In association with Insurance Day.
article: Life & Pensions Solvency II Special Report 24 December 2008 Roundtable partners Barrie & Hibbert and Towers Watson, together with industry leaders, recently took part in a unique forum that discussed the modelling and systems challenges of Solvency II.
article: Insurance Day 8 December 2008 Quarter 2/Solvency II round-up - Insurance Day special report
article: Solvency II – will it change anything? 21 November 2008 As adoption of the Solvency II Framework Directive draws nearer, we consider whether this significant update to the the European (re)insurance solvency regime will really change anything, in particular for UK insurers already operating under the FSA ICAS regime.
article: Building internal models - challenges and issues 21 November 2008 Developing an internal model can be a prolonged and challenging process. However, a good quality model can form an important part of a company’s risk management toolkit. Many companies will want to use internal models for calculating regulatory capital when the European solvency regime (Solvency II) comes into force.
eAlert: QIS4 summary results and Solvency II update 28 October 2008 On 20 October the Committee of European Insurance and Occupational Pensions Supervisors (CEIOPS) presented to its stakeholders the main preliminary results of the fourth quantitative impact study (QIS4) and provided a brief update on the Solvency II timetable. Some highlights of the discussion at the stakeholder meeting are set out below.
article: Enterprise Risk Management - a practical reality 13 October 2008 While the concept of Enterprise Risk Management ("ERM") has been around for many years, activity has intensified in recent times due to increased focus from ratings agencies, regulators, supervisors and investors and as a result of leading insurance groups extolling its virtues.
article: Solvency II and QIS4 - time to prepare 2 October 2008 Richard Bulmer and Dean Swallow look at some of the issues and challenges facing insurers in the run-up to implementation of Solvency II.
e-Alert: FSA issues Discussion Paper 08/4 on Insurance Risk Management: The Path To Solvency II 30 September 2008 On the 25 September 2008, the FSA issued Discussion Paper 08/4 "Insurance Risk Management: The Path To Solvency II". The Discussion Paper (DP) appears chiefly aimed at reducing any complacency there might be in the UK insurance industry about Solvency II resulting from the seemingly distant October 2012 target implementation date and the headstart over much of Europe that the SYSC and ICAS requirements have potentially generated.
article: Solvency II group support - Towers Watson, Aegon and PWC discuss uncertainties 26 August 2008 [First published by Complinet and reproduced with their permission] - Insurers are awaiting certainty on equivalence criteria for jurisdictions outside the European Economic Area in relation to group support within Solvency II, according to actuarial experts.
e-Alert: Solvency II - the launch of QIS4 18 July 2008 The Committee of European Insurance and Occupational Pensions Supervisors (CEIOPS) formally launched Quantitative Impact Study 4 (QIS4) on 1 April.
article: Meeting the challenges of internal models 1 July 2008 Key issues faced by insurers in implementing the internal models that have challenged European insurance companies preparing to meet the requirements of Solvency II.
press release: Only one third of insurers take full-hearted approach to QIS4 19 May 2008 While the majority of UK insurers say they will participate in QIS4 in some capacity, only a third will be undertaking advanced recalculation in line with the QIS4 specification, according to a survey by leading global consultants Towers Watson.
article: Exploring the darker corners of Solvency II 1 August 2007 Mark Chaplin examines some of the aspects of Solvency II which, while receiving little attention to date, could have a profound effect on the impact of the new European regulatory initiative.
Insights on Solvency II Paul Whitlock, Managing Director
We discuss how Solvency II is poised to change the landscape of the European insurance market.
Copyright 2012 Towers Watson. All rights reserved.