Solvency II and Reinsurance

Jürgen Wielandts

The impact of Solvency II will not be limited only to the risk takers in the (re)insurance market. All anchors will be affected, and for many of them it will be a challenge to define their role in the new environment and, if possible, find new opportunities or redefine their role from a new angle.

Insurance groups are being forced to consider simplified operational and legal structures in order to gain maximum diversification and capital fungibility benefits that are promoted in the Solvency II capital standards. Understanding the benefit of an optimal group structure can help to reduce significantly the compliance requirement and the solvency capital requirements (SCRs) for the group. The more separate legal entities in the group, the greater the challenge will be in terms of managing their reporting and compliance requirements.

Regulators who have digested the 2007–08 financial crisis and its impact on insurance groups will find it challenging to work in a college of supervisors, where a lead supervisor engages with local supervisors. Local policyholder protection, one of the main drivers of Solvency II, will have to cope with cross-border stakeholders and views on regulatory