Solvency II and Asterix the Gaul

Nicolas Michellod
Insurance Experts' Forum, January 25, 2010

Since the publication of my Solvency II report in April 2008, there have been a lot of discussions around the new set of prudential regulation currently in implementation in Europe. For instance, there is a wave of criticism coming from France, notably from major players on the market. According to Groupama, a few internationally diversified banks have nearly collapsed in the recent past, demonstrating that the Basel II regulation could not prevent even well-diversified institutions from experiencing solvency problems. Therefore, what happened to the banking sector with Basel II during the financial crisis should prompt a reconsideration of the whole set of regulation and approach of Solvency II.

More recently, a French association gathering mutual insurers called the “Réunion des organismes d’assurance mutuelle (Roam)” representing 7% of the French market (around 10 million insured) has launched a Web site called “stopsolvabilite2.com,” demonstrating that not only major French insurance players are worried about Solvency II and dubitative about the real benefits the new set of regulation can bring. Among others, what French insurers and mutual companies fear is that Solvency II could have potential negative consequences on future growth and consumers. They believe that consumers would not be more protected than they are today with the current solvency regulation, and that Solvency II also might trigger tariff increases and decrease the level of competition due to concentration or failure of companies.

These actions led by French insurance companies could trigger new rounds of discussions and delay the effective implementation of the Solvency II directive. There is a country in the middle of the European community that some insurance companies have decided to resist. This could be a new story of Asterix the Gaul.

This blog has been reprinted with permission from Celent. Nicolas Michellod is a senior analyst in Celent's insurance practice, and can be reached at nmichellod@celent.com.

The opinions posted in this blog do not necessarily reflect those of Insurance Networking News or SourceMedia.

Comments (0)

Be the first to comment on this post using the section below.

Add Your Comments...

Already Registered?

If you have already registered to Insurance Networking News, please use the form below to login. When completed you will immeditely be directed to post a comment.

Forgot your password?

Not Registered?

You must be registered to post a comment. Click here to register.

Blog Archive

The Pitfalls of Using Assembly Line Methods to Create Software

Most of the time, when the business needs IT, it is for custom software development, just like creating a concept car.

Wearables and Gamification in Life Insurance Goes Mainstream?

With so many U.S. households still uninsured, insurers are going have to try new things to re-position their product, focusing on consumer needs.

Will John Hancock Vitality Transform Insurance?

The Vitality program integrates this information directly into the rewards, giving you credit for the exercise, just by virtue of reporting it.

Why Customers Should Want Innovative Insurers

At a time when confidence in the insurance industry has been compromised, innovative companies can break the mold.

Five Ways to a Positive User Experience

The user experience can make or break an application. Here are five ways to measure whether itís positive or negative.

Innovation & Insight Day Recap

The Insurance Team recognized fifteen model banks across five categories: Digital; Data Mastery; Legacy and Ecosystem Transformation; Innovation and Emerging Technologies; and Operational Excellence.