Insurers urged to take action on Solvency II
5 August 2008

Written by Sophie Baker

Insurers must act now on Solvency II and learn lessons from Basel II experiences, says Aon Consulting.

At a roundtable held by Aon, delegates were encouraged be a panel of speakers to view the impending regulations as a chance to create wider business opportunities.

Solvency II aims to protect policyholders and ensure the financial security of insurers and is scheduled for implementation in 2012. However, insurers are being urged to act now to influence the drafting of the legislative text before the process gains speed in 2009.

Aon has highlighted the potential issues of complexity and time-consumption in the implementation of Solvency II, as was seen for Basel II which required significantly more resource than expected. Learning from this, Aon recommends that insurers identify and secure an executive level sponsor within their business and that insurers bring together a team to lead the project with the necessary skills in place.

Tony Hills, director at Aon’s financial institutions team, commented: “Solvency II presents a significant challenge to the industry, especially with the process for drafting the legislation text due to start in 2009. And with implementation due in 2012, businesses in the sector need to start preparing for this now. As with previous regulatory frameworks, there are considerable opportunities available and it will be interesting to see which businesses are in a position to take advantage of them.”