Richard Ward says standard formula 'does not work' for large global players
Lloyd’s is calling for cuts to the amount of capital insurers need to hold under the incoming Solvency II regime.
Lloyd's chief executive Richard Ward, quoted in today's Financial Times, said: "It is glaringly obvious the standard formula does not work for global players like Lloyd’s. It is too onerously calibrated, particularly in its assumptions around catastrophe risk.”
The Solvency II regime will take force from 1 January 2013 and requires all insurance and reinsurance firms across the EEA to hold more capital.
Lloyd's companies are heavily exposed to catastrophe risks, with about half of its business written in energy and property lines at great risk from catastrophe loss.
Lloyd's wants approval for its own more internal model allowing it to hold less capital than the standard formula.
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