A new report from Deloitte states that
the postponement of Solvency II is costing insurers, with
almost three quarters saying implementation setbacks have taken a
toll on their original budgets, and 42% will have to increase
budgets by more than 5% as a result of the delay to full
implementation of Solvency II to 1 January 2014.
Rick Lester, lead Solvency II partner at
Deloitte, said: “The primary underlying cause for concern is the
continued uncertainty around the detailed requirements of Solvency
II and the fact that these are unlikely to be clarified until
relatively close to the go-live date.
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“This means there will be not much time for
insurers and regulators to finalise their arrangements and approach
with complete knowledge of the rules.”
Tristan Garnon-Williams, policy adviser at the
Association of British Insurers (ABI), said: “A lot of Solvency
II’s costs are more upfront and obvious. But you expect to see
positive business results through things like improved risk
management, better understanding of risks and through the [own risk
and solvency assessment] ORSA processes. It’s reasonable to expect
those benefits to manifest over a longer time horizon, which is
maybe why people cannot see them as quantifiable at this
stage.”
Of the insurers polled in the report, 25 were
non-life and 35 were life companies. Respondents were grouped in
size from the very largest with more than £1bn in net written
premiums; (NWP) medium sized-companies with between £300m and
£1bnin NWP.
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