Bridging risk and capital: Edition 4

Countdown to Solvency II ()

This is the fourth edition of Countdown to Solvency II. It features articles on UK and German regulation, project management for multinationals, data and systems, and governance. Here's a short resume of each article:

Call for action: UK and Germany regulators point the way

As the development of Solvency II moves from legislation to the practicalities of implementation, initiatives being put in place by the UK FSA and German BaFin provide important insights into how the directive is likely to be applied.

Smart implementation for multinational insurers

For large multinational insurers, the already daunting task of preparing for Solvency II is likely to be heightened by the diverse nature of their operations and extended lines of command. However, the directive also offers valuable opportunities to enhance the quality and consistency of management information and streamline the operational infrastructure of the group.

Engineered for success: developing effective data and systems capabilities

Solvency II is likely to require a substantial increase in data gathering and computational capacity within many European insurers. The good news is that by leveraging enterprise risk management (ERM) capabilities and aligning the implementation of new information systems with developments in financial reporting, firms could not only reduce costs, but also deliver more of the benefits.

No surprises: An opportunity to reinforce governance

Solvency II is set to impose extensive governance requirement for insurers of all sizes. Although some insurers may opt for straight compliance, this may miss a valuable opportunity to strengthen stakeholder confidence and provide greater assurance for the board.

Browse Solvency II publications by topic:

Taking the tax headache out of investment income allocation

This PwC publications looks at the key transfer pricing considerations under Solvency II for pan-European insurance groups with branch structures.

Getting to grips with Pillar 3

We explore the strategic and practical issues facing insurers as they implement the Solvency II insurance reporting and disclosure requirements under Pillar 3.

Bringing IFRS and Solvency II together

Keep up with insurance regulation. Solvency II and IFRS overlap so save money and time by doing things once, and improve your market reporting.

Insurance regulation goes beyond Solvency II

Watch video outlining how insurance regulators are actively working on a range of insurance directives in addition to Solvency II

Cutting through the regulatory knot

The aim of this paper is to help insurers cut through the detail by looking at the underlying trends that are shaping the latest regulatory developments, the thinking behind them and the implications for their strategy and operations.

Choosing the right IT systems for Solvency II

This PwC publication examines the growing technology options being developed for Solvency y II and assesses the IT systems architecture and solutions now available.

Pillar 2 - Challenging your own risk culture

This PwC publication explains why Pillar 2 is the catalyst that will challenge insurers’ risk culture, governance and risk management. But how do you interpret and apply the regulations to create an efficient risk management process?

Developing the investment strategies and operational capabilities that could help you to attract more business from insurers.

This PwC publication explain why insurers will want to rethink their investment strategies because of Solvency II, which will have a big impact on asset managers, a huge proportion of whose business comes from insurers.

Building Solvency II equivalence into your strategic plans

This PwC video examines transitional and US equivalence issues under Solvency II and its implications for how businesses are structured, where they are domiciled and how decisions over reinsurance and acquisitions are made.

Learning from the early movers ― the Lloyd’s Solvency II IMAP experience

This PwC paper discusses the fact that syndicates at Lloyd’s have already had to complete the development and begin the embedding of a capital model which meets Solvency II standards as Lloyd’s prepares for its market-wide model application in April 2012 and asks: As other insurers gear up for the final stages of the model application process, what can they learn from the Lloyd’s businesses that have been there ahead of them?

Countdown to Solvency II: A step forward for Solvency II reporting requirements

EIOPA have made some significant decisions on quantitative reporting measures in response to stakeholders’ concerns. Here we discuss implications, areas of uncertainty and the deadlines.

Countdown to Solvency II: Getting Pillar 3 on track - don’t risk delay

Pillar 3 can’t be put off any longer. So how can you get Pillar 3 implementation on track, who should be involved and what are the potential bottlenecks?...

Maximising value from your reinsurance spend

PwC's 'Maximising value from your reinsurance spend' explains why insurers are overlooking an opportunity to improve their reinsurance purchasing power.

The Survivors' Guide to Solvency II

This series of articles draws from PwC's extensive work with clients and regulators to offer you insightful guidance that focuses on the practicalities rather than the technicalities of Solvency II.

Countdown to Solvency II: Managing the impact of Solvency II on your credit rating

PwC is helping a range of insurers to get to grips with the practicalities of Solvency II implementation.

Countdown to Solvency II: Understanding where Solvency II is heading

A one-year delay to the Solvency II implementation date appears all but confirmed by the latest draft Omnibus II Directive, published in July 2011 by the European Parliament, providing clarity in some areas yet signposting places where further debate will be needed.

Countdown to Solvency II: Is a full internal model a step too far?

Whether to opt for an internal model, the standard formula or one of the options in between is one of the most crucial decisions within Solvency II. It not only affects your firm's capital requirements, but also the way the business is managed and perceived by stakeholders.

Countdown to Solvency II: Managing spreadsheet risks

While spreadsheets will remain an important tool under Solvency II, they can be inherently difficult to control. Reducing dependence on spreadsheets will therefore be the first priority...

Countdown to Solvency II: Validating your model

Model validation is one of the six key tests for model approval, however, few insurers have made much headway in model validation. Insurers have until April 2012

Are you delivering your model expectations?

The business case for insurers’ current investment in financial models is based on leveraging significant operational and commercial advantage post-implementation. Inside this PwC publication, see how well are they doing.

Countdown to Solvency II: Taking the strain out of technical provisions

While the technical provisions are undoubtedly a challenging area of Solvency II implementation, many insurers may be making them more complicated than they actually need to be.

Understanding the implications of QIS5

Understanding the implications of QIS5. The results from QIS5 published by EIOPA show that in many areas the requirements tested were broadly appropriate, but a significant number still require change. Read the full publication.

Countdown to Solvency II: Getting the balance right

Your documentation is the public face of your Solvency II programme. It helps you to make a convincing case to your supervisor that your capabilities and approach are fit for purpose. How can you provide the right kind of documentation to demonstrate compliance without swamping your business in needless paperwork?

Video: Clicking in to Solvency II

Alwin Swales, a director in our Solvency II team, looks at how to gear your systems and technology to the tough new regulatory and business demands.

Countdown to Solvency II: Confidence in your capital: The Solvency II data directory

Confidence in your capital: The Solvency II data directory

Countdown to Solvency II: Making your capital work harder

Insurers seek to structure their operations so that they are capital and tax efficient - Solvency II has changed the playing fieldThe fifth quantitative impact study (QIS5) has demonstrated that capital management structures that are tailored to existing regulation are likely to be less efficient under Solvency II. What can you do to improve your capital position?

Video: How will Solvency II affect your credit rating?

Simon Martin, a PwC Director in our UK rating agency Advisory team, discusses how rating agencies are responding to Solvency II and how it could affect your credit rating.

Countdown to Solvency II: Meeting the people test

Instilling risk awareness into the culture and decision making of your organisationModels don’t make decisions, people do.

PwC responds to the consultation document issued by the Commission Service

Following the opportunity given by the Commission Services to comment on their consultation document on the Level 2 implementing measures for Directive 2009/138/EC on the taking-up and pursuit of the business of Insurance and Reinsurance (‘Solvency II’). PwC are pleased to provide their response.

PwC summary of Omnibus II

On 19 January 2011 a provisional version of the draft text of the Omnibus II Directive was published. This directive will, if adopted, amend the Solvency II Directive. A summary of Omnibus II’s more significant proposals is set out in this document.

Getting set for Solvency II: Comparing goals and benchmarking progress on Solvency II implementation across Europe

Getting set for Solvency II outlines the findings of a survey looking at European insurers' readiness for implementation. The survey aims to provide a benchmark against which you can compare your own progress.

Countdown to Solvency II: Up to speed with reporting

Countdown to Solvency II. Keeping pace with faster turnaround times for regulatory returns.

Countdown to Solvency II: Driving the ORSA intop decision making

Countdown to Solvency II. Preparing the Own Risk and Solvency Assessment (ORSA) and building it into a running of the business.

Countdown to Solvency II: Coming up with the numbers

Preparing a Solvency II balance sheet and managing the impact on market communications.

Countdown to Solvency II: Driving capital efficiency

Solvency II will intensify the pressure on capital, cost and tax efficiency, making the potential benefits from corporate restructuring even greater.

Getting to grips with the shake-up

This publication examines the differences and similarities between the two frameworks and start to assess how this will affect reporting systems, management evaluation and market communication.

The Survivors' Guide to Solvency II

The Survivors’ Guide to Solvency II has been prepared by subject matter experts from PricewaterhouseCoopers LLP. Drawing on our research and work with clients, the guide covers areas that are causing the greatest difficulties for insurers or may have been missed altogether. The focus is on the practicalities rather than the technicalities, along with the implications for the strategy and management of the business.

Video: Engine of embedding: The Own Risk and Solvency Assessment

Here, we explore the key issues of Solvency II and provide insight into the challenges insurers face as they implement its requirements.

Video: Data quality: What does that mean in practice?

Here, we explore the key issues of Solvency II and provide insight into the challenges insurers face as they implement its requirements.

Video: Preparing a Solvency II balance sheet

Charles Garnsworthy, a partner in PwC Solvency II team, assesses the technical, logistical and market communications challenges of preparing a Solvency II balance sheet.

Video: Risk appetite: From conceptual nicety to practical tool

John Bromfield discusses how to make risk appetite a key tool in the management of the business.

Countdown to Solvency II: Industrialising Solvency II - Delivering sustainable business benefits

Early steps to integrate Solvency II into business as usual will be crucial in reducing compliance costs and realising the competitive benefits. How can insurers lay the foundations for sustainable ‘industrialised’ implementation?

Countdown to Solvency II: Where’s the benefit? Effective communication in a Solvency II world

Rather than strengthening risk and capital disclosure, Solvency II could lead to a reporting overload. How can insurers strike a balance between meeting regulatory expectations and providing information that would help them to convey the true strength and potential of the business?

Countdown to Solvency II: Risk appetite: A key management tool

Solvency II requires insurers to align their risk taking with a clearly articulated risk appetite, creating an opportunity to turn risk appetite from a conceptual nicety into a practical and valuable management tool.

Countdown to Solvency II: Guide to Undertaking QIS5

The fifth Quantitative Impact Study (QIS5) provides a last chance to gauge the likely capital requirements and balance sheet impact on your business of using the Solvency II European Standard Formula. Here is a quick guide to undertaking QIS5 including timings, preparations and key people required.

Video: Making the most of QIS

Gauri Shah of PwC’s Solvency II team looks at how you can make the most of QIS 5 by using the results to help shape more effective business and implementation strategies.

Video: Developing effective programme management and implementation

George Stylianides, a partner in PwC’s Solvency II leadership team, looks at how to ensure that programme management for Solvency II is clear, credible and deliverable.

Video: Industrialisation - making it sustainable

Here, we explore the key issues of Solvency II and provide insight into the challenges insurers face as they implement its requirements.

Countdown to Solvency II: Shaping Up Solvency II and M&A

How will the strategic implications of Solvency II drive M&A and what will be the impact on the shape of the industry?

Countdown to Solvency II: Worth Using

The ‘use test’ is proving to be one of the toughest aspects of the internal model approval process (IMAP). How can firms get up to speed while reaping the competitive benefits of a more effective basis for decision-making?

Countdown to Solvency II: The forgotten pillar

Solvency II is set to impose huge extra demands on risk and capital management disclosure.Yet reporting is still a low implementation priority. How can insurers get their preparations on track?

Video: The coming shake-up: Overview of Solvency II

Here, we explore the key issues of Solvency II and provide insight into the challenges insurers face as they implement its requirements.

Video: Use it, don't lose it: The internal model approval process

Here, we explore the key issues of Solvency II and provide insight into the challenges insurers face as they implement its requirements.

Countdown to Solvency II: Data quality: Don’t leave it until last!

With so much of the Solvency II implementation project resting on the quality of the data, now is the time to make data a priority and get preparations on track.

Countdown to Solvency II: Risk management framework: What’s that really all about?

Solvency II requires insurers to put in place an effective risk management framework. But what does that actually mean in practice and what are the biggest challenges?

Countdown to Solvency II: Model approval: Preparing a convincing case

With the internal model approval process (IMAP) likely to be a learning curve for both supervisors and applicants, what practical steps can companies take to make a convincing case?

Gearing up for Solvency II: Making Solvency II work for the business

This is the 3rd edition of Countdown to Solvency II from our international Solvency II team. It examines how to make the most of QIS 4 and view it as an opportunity to understand the commercial implications of Solvency II.

Solvency II: Exploring the Draft Directive

The paper has been prepared by our PwC Solvency II professionals and provides an overview of the draft directive proposals along with a checklist of readiness and milestones which we hope will help companies carry out an initial impact assessment and prepare implementation plans.

Bridging risk and capital: Edition 4

Call for action: UK and Germany regulators point the way

Smart implementation for multinational insurers

Engineered for success: developing effective data and systems capabilities

No surprises: An opportunity to reinforce governance

Browse Solvency II publications by topic:

Key issues