Solvency II: Get ahead of the curve

QUICK LINKS

With Solvency 2 we are preparing the most significant regulatory changes in the

insurance sector in 30 years.

Michel Barnier

FINANCIAL SERVICES SECTORS

ADVISORY SERVICES

IMPLEMENTING ERM

TACKLING RISK APPETITE

CORPORATE GOVERNANCE

QUANTITATIVE RISK ANALYSIS

The American essayist George Santayana famously observed: "those who cannot remember the past are condemned to repeat it."

Yet with Solvency II, already many firms are failing to learn the lessons of history from the failings in the implementation of Basel 2, many of which contributed to the carnage of the recent financial crisis. The irony is compounded by many role descriptions for Solvency II programme managers calling for Basel 2 experience.

If Basel 2 should have taught us anything it is that the technical aspects of Pillar 1 are not where the problems arise at a firm level. There aspects have the steadfast attention of implementation teams, internal and consulting actuaries and auditors' insurance advisory practices. The numbers will change, and capital requirements will flex around the results of QIS 5 and assorted EIOPA technical guidance documents, but the basics are already there.

Instead, just as for Basel 2, it is the more demanding qualitative and behavioural governance and risk management requirements of Pillar 2 that firms' performance will rise and fall.

And this stuff matters. Solvency II is a huge cost to firms. All must bear it to a greater or lesser degree. But how well firms respond to the new regulatory blueprint for their risk governance practices will determine how they stack up relative to peers in terms of capturing competitive benefit from the money they spend.

As a multi-disciplinary practice, we can cover off your technical requirements and help you to navigate the perilous waters of internal model approval; that is a given. But we can also help you to address the board-level and senior management challenges of Solvency II and the change requirements that come out of improving governance and risk management in your firm. That's where the real value comes in.

WHITE PAPER ON SOLVENCY II

How well firms respond to the new regulatory blueprint for their risk governance practices will determine how they stack up relative to peers in terms of capturing competitive benefit from the money they spend.

SUBMISSION ON SOLVENCY II