Countdown to Solvency II

This is the fifth edition of Countdown to Solvency II written by PricewaterhouseCoopers international Solvency II team.  In it we explore

1. what insurers are telling us are going to be the challenges ahead
2. the new risk management regulation in Germany and its implications for regulators and insurers elsewhere
3. how the ORSA is set to be an important regulatory mechanism;  and
4. when it comes to Pillar 3 disclosures, is minimalism best?

This edition includes the following articles:

Solvency II on the radar: Insurers' views on the challenges ahead
A poll of insurance professionals carried out by PricewaterhouseCoopers at the end of last year shows that Solvency II is now firmly on the Board agenda. Yet many firms are concerned that their ability to meet key implementation deadlines and realise the business benefits of their investment may be impeded by potential project overload and lack of available talent.

Solvency II takes shape: Emerging blueprint for implementation
With the launch of significant new supervisory guidance and overhaul of risk management regulations in Germany in anticipation of Solvency II Pillar 2, a clearer picture of how the principles of the new directive are likely to be put into practice is beginning to emerge. Here we discuss what regulators are likely to expect and the resulting implications for insurers.

Winning over key stakeholders: The Own Risk and Solvency Assessment
The Own Risk and Solvency Assessment (ORSA) is an opportunity to showcase the firm’s risk management capabilities and demonstrate how risk and capital management is used to support decision making and ultimately create value. We examine why the ORSA is set to be such an important regulatory mechanism under the new regime and how it will provide firms with an opportunity to extract real business value from their Solvency II investment.

In the best light: Making the most of Pillar 3
Many banks’ Pillar 3 disclosures have been limited to basic compliance, offering little insight into how risk is managed or how it influences strategy. With the demand for transparency increasing in the wake of the financial crisis, could this minimalist approach be missing a valuable opportunity to demonstrate the strength of risk and capital management and its value to the business? Here we explore what can be learned from banks’ approach to Pillar 3, the disclosure challenges facing insurers under Solvency II, and how effective risk reporting could be turned into a source of competitive advantage.