According to the study carried out by the company, only 6% of insurance industry executives said the costs associated with Solvency II are reasonable, while rest claimed that the new capital rule will increase their financial burden.

With an aim to better protect consumers in the wake of a financial crisis, the new capital regulations will force insurers to equalise their capital buffers more closely with the risks on their books.

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Grant Thornton interviewed about 77 senior executives in the UK’s non-life, life and health insurance markets over two months, and found widespread concerns across the industry.

According to the report, nearly 76% of respondents stated the costs of Solvency II are disproportionate, whereas 65% stated the value added will not rationalize expenses incurred.

Almost 62% participants who participated in the survey noted that preparations are disturbing senior management from the day-to-day running of their business.

Grant Thornton actuarial and risk UK head Simon Sheaf was quoted by postonline.co.uk as saying, "The volume of work and resources that have gone into preparations for Solvency II compliance have been astounding and insurers have substantial reservations regarding the impact this has had on their businesses."

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Despite widespread notion that new EU capital will prove to be a necessary evil, nearly 94% respondents consented with the principles of Solvency II while 74% noted that the principles have been wrecked by the implementation.

UK insurance chairman and Grant Thornton partner Craig Scarr told postonline.co.uk, "The industry has largely been in favour of the principles behind Solvency II for some time."

"However, the opacity around implementation deadlines and precise requirements are continuing to make the pill-swallowing an even more bitter exercise," Scarr told the publication.