Rethinking Ratings

Solvency II is changing the way insurance companies operate. How are rating agencies adapting to that change? And what issues would insurers most like to see them address as they amend their methodologies? Laurence Neville reports

Implementation of Solvency II, a European Commission-initiated project which sets new standards for capital adequacy for insurance companies, may be four years away with large elements of it yet to be decided, but its implications are already being felt by the insurance industry and by the rating agencies that play such a crucial role in insurers' businesses.

European insurers have begun a process of re-examining how they model and manage risk and, necessarily, how they operate. This trend is