Thursday, 10 November 2011
Theis urges insurers to step up Solvency II lobbying effort
The European insurance industry must step up its lobbying effort on Solvency II to seek more time to carry out the big changes needed and avoid handing over competitive advantage to non-EU insurers, according to a leading European corporate insurance executive.
Axel Theis, CEO of Allianz Global Corporate & Specialty (AGCS)
Axel Theis, CEO of Allianz Global Corporate & Specialty (AGCS), told delegates at the annual ANRA conference in Milan yesterday that Europe’s insurers will be competitively ‘challenged’ by Solvency II and that they need to lobby for more time to prepare.
Mr Theis also said that the new capital adequacy and reporting regime for the insurance industry that will kick off on 1 January, 2014 will have a ‘strong impact’ on captives that only adds to the need for more time to prepare.
“All the recent regulatory changes have been done with good intentions,” said Mr Theis. “They [the EU and international standard setting bodies] have harmonised regulation, tax and defined systemic risks and introduced a more harmonised labour law and consumer protection on the pension side, corporate governance, accounting rules and Solvency II.”
Mr Theis pointed out that despite all the regulatory efforts the EU’s common supervisory framework is still a work in progress. Moreover, Germany only accounts for about 10% of AGCS turnover and so it has the ‘pleasure’ of dealing with many very different regulators which is not simple, he explained.
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“These are challenging times and we all need to lobby for more time to transform our business and make sure that the regulation stays at an agreeable level and does not become a burden for all of us,” said Mr Theis.
Solvency II is a ‘huge undertaking’ for a company like Allianz and even for a subsidiary such as AGCS, explained Mr Theis. He said that the estimated cost for AGCS alone to implement an internal model will be about €1.5m a year.
“This will definitely put European companies in a challenged competitive position compared with non-European companies and there will also be a strong impact on captives. Again we need to strengthen our lobbying undertakings to make sure there is enough time to transform the internal models to meet Solvency II requirements. There might be a need for achieving some easing [of the timetable],” said Mr Theis.
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