Solvency II

WHAT IS THIS? Europe’s Solvency II directive came into effect in 2016, putting risk at the heart of a harmonised prudential framework for insurance firms. Similar in outline to the banking industry’s Basel standards, Pillar 1 sets out quantitative requirements; Pillar 2 tackles risk management and governance; Pillar 3 addresses transparency, reporting and public disclosure.

Validating interest rate models under Solvency II

With Solvency II fast approaching, obtaining approval for your internal model is increasingly important. A key part of this process will be to demonstrate the ability of the model’s scenario generation to describe the evolution of interest rates…

Insurers prepare for M&A explosion

A number of drivers could push financial groups to dispose of life insurance assets in the near future. But a boom in M&A will also need buyers, which could prove difficult to find. By John Ferry

Mexico and Brazil on the road to risk-based regulation

Latin American economic powerhouses Brazil and Mexico are introducing new solvency regulations in their fast-growing insurance markets. But while Mexico has gone straight for a Solvency II-type approach, Brazil is emphasising gradualism and will not make…

Understanding the liquidity premium

The liquidity premium has moved from theory to practical reality, first in the market-consistent embedded value metric and then the Solvency II directive. Barrie & Hibbert’s Craig Turnbull explains the theory behind the liquidity premium and how to…

QIS 5 makes its mark

European insurers are gearing up to take part in Solvency II’s latest and final quantitative impact study. John Ferry assesses what the latest proposals suggest about the impact of the new regime

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