Italy faces Solvency II crunch

gavellaw booksItalian insurance firms may find complying with the Solvency II Directive most problematic out of all EU countries due to a vast gulf between its mega insurers and smaller players, a report finds.

Meanwhile, insurers in Germany are in a good position due to similarities between domestic regulations and the EU’s Solvency II rules.

Solvency II comes into force in January 2016 and some asset management firms expect that helping insurers handle their solvency requirements will be a growth area. JP Morgan Asset Management, for example, recently created a new role for an insurance leader covering Germany and Austria.

Of Italy, the report – called The European race to the Solvency II finish line – by regulatory services provider Silverfinch, says: “The sector is dominated by two key operators who have the breadth of influence and experience to deal with the broad aspects of Solvency II. Below that however are a myriad of much smaller operations, who are struggling to tackle many of the aspects of the new rules.”

In general, the report says Northern Europe firms are less prepared than their southern counterparts for the Solvency II insurance directive and also that the attention that firms are putting on reporting requirements varies between countries.

French insurers, for example, have focused on ‘Pillar 3’ of Solvency II, which relates to reporting the financial health of the insurer.

“Across Europe, the majority of asset managers are aware of the benefits of helping their insurance clients with Solvency II, but how to respond to the new regulations has clearly split the continent,” says John Dowdall, managing director of Silverfinch.

State Street recently found that a number of alternative fund managers and underlying managers to fund-of-funds providers may be reluctant to provide data that insurance companies need under Solvency II regulations.

©2015 funds europe