Friday, 17 February 2012
Insurers overwhelmingly concerned about data requirements of Solvency II
Over 90% of insurers remain concerned about their ability to meet the data reporting requirements of Solvency II, according to a survey by investment and risk management advisory firm BlackRock.
Karel van Hulle, Head of the insurance and pension division at the European Commission and overseeing Solvency II
The survey of 220 insurers from 18 countries also found that insurers expect to increase their investment in alternative assets as they search for yield, despite the potentially higher charges they might face under the capital adequacy-based regime.
BlackRock's survey revealed that 94% of respondents are 'very or somewhat concerned' about meeting Solvency II's data reporting requirements on time, with 95% concerned about completing them in full.
The vast majority of insurers, 92%, are anxious about the quality of data they will receive from third parties.
Please sign up here to our full-time mailing list to ensure that you receive our weekly newsletter.
In particular, pressure is on third parties to provide the capability to 'look through' portfolios, including those in pooled vehicles, said BlackRock.
92% of respondents are concerned that they will have to limit their investment strategy as some assets demand more rigorous data requirements.
There is a clear disconnect between insurers’ confidence in meeting the requirements of Solvency II and the understanding of the necessary time and resources needed to meet these challenges—specifically in relation to ‘look through’. Anxieties about data management must be tackled if insurers are to achieve the optimum investment strategy and asset allocations to deliver superior returns, and consequently they may need to revisit the amount of time and resource they invest in this area,” said David Lomas, Global Head of BlackRock’s Financial Institutions Group.
With prolonged periods of frustratingly low interest rates and overall slow growth set to continue, insurers may look to alternative asset classes to boost income, said BlackRock.
Almost a third, 32%, expect to increase their allocations to private equity and hedge funds.
As they plan for this new regulation, insurers face a market environment of unprecedented challenges including: a continued sovereign debt crisis, frustratingly low yield from traditional fixed income, high levels of equity market volatility, and anaemic economic growth. Against this backdrop, insurers need income to meet their liabilities and the research shows they may look to increase their allocation towards alternative asset classes such as hedge funds and private equity to achieve this,” explained Mr Lomas.
Please sign up here to our full-time mailing list to ensure that you receive our weekly newsletter.
Innovation debate hots up as JLT launches intangible package
Guernsey made right decision to avoid ‘disproportionate demands’ of SII—Aon
Corporate round-up
Time to ‘end the deadlock’ on CBI says DVS commitee
German risk managers unhappy with cyber products on offer
Insurers expect further delay to Solvency II start date
Lloyd’s plans expansion into German D&O market with Dual Deutschland
Corporate round-up
Fluid capital may curtail hard market but brings risks for mutuals
Vast potential in Brazil continues to draw foreign insurers despite ‘ferocious’ regulator’s reputation
Canopius to acquire Omega and form partnership with Tower Group
Corporate round-up
New working group looks to develop minimum conditions for cyber cover
Co-insurance creates risks for industry in Brazil, experts warn
AGCS vows to triple business from emerging markets
XL restructures international insurance business
UK market stable as rate increases offset by sluggish economy—Moody’s
Global property rates continue to rise in Q1
Allianz to push company health schemes in Germany
Mixed response to global programmes database plan suggests slow progress
Spanish insurers fret over Solvency II ORSA requirements but gloss over eurozone threat
