“Solvency II is starting to unravel.” So says KPMG’s Rob Curtis – and they are words that should strike fear into the heart of any insurer
The European insurance industry is about to have a once-in-a-generation overhaul, and a year and a half before the go-live date, the FSA has just figured out that it can’t stick to its promises on internal models.
That means more firms will have to use the standard model – and have to hold much more capital in consequence. What’s more, the FSA will focus on helping the top 10 insurers and Lloyd’s players get their internal models over the bar, leaving the rest of the market hanging. They can pay for external consultants if they wish, but these are likely to be very scarce and very expensive.
This is a major blow, both in its own right and because of the questions it raises about the FSA’s competency and the industry’s preparedness. Right now, neither are looking good.
• Sabre has performed a motor miracle. In the toughest market in a generation, the specialist insurer has posted a combined operating ratio below 80%. Like Admiral, it seems to be defying gravity.
Chief executive Keith Morris believes that it’s all about writing specialist business, so the question is: can big ever be beautiful in the motor market?
Zurich’s decision to return to the market in the second half of this year, reported last week, suggests confidence, but you only have to look at RBSI to see what happens to volume players.
As we explore in The Knowledge – our in-depth look at individual lines of business, starting with motor this week – there’s a buzz about the market again, but prices will have to keep right on rising if mainstream insurers are ever to turn a profit.
Hosted by comedian and actor Tom Allen, 34 Gold, 23 Silver and 22 Bronze awards were handed out across an amazing 34 categories recognising brilliance and innovation right across the breadth of UK general insurance.
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