Premium content: Firm’s insurance units now up to speed with Solvency II after capital injection

Gary Humphreys

Markerstudy’s insurance companies in Gibraltar and Malta are now up to speed with Solvency II’s capital requirements after shareholders injected more than £45m last year, Insurance Times can reveal.

Solvency II came into force on 1 January 2016, and Markerstudy took advantage of the new capital regime’s transitional provisions, which allow companies that need it an additional two years to get up to speed with the Solvency Capital Requirement (SCR) – Solvency II’s main capital standard.

Markerstudy group underwriting director Gary Humphreys (pictured) confirmed that Markerstudy’s insurance companies had exited transitional provisions that following a total capital injection of more than £45m at group level from shareholders during 2016. Markerstudy Insurance Company and Zenith Insurance in Gibraltar and Markerstudy’s Malta-based insurer St Julians now have capital in excess of Solvency II’s SCR.

The holding company for the group, however, will remain in transitional measures until it has completed a restructuring. Under the restructuring, non-insurance businesses will be transferred outside the group. In addition to its insurance underwriting and broking business, Markerstudy has other interests, including leisure businesses.

Humphreys told Insurance Times: “We are comfortable with our SCR coverage currently for the underwriting vehicles and don’t anticipate that any further capital injections will be required in 2017.”

According to Insurance Times calculations, Markerstudy Insurance Company had a solvency ratio of 153% under the old Solvency I regime as of 31 December 2015, just before Solvency II came into force. Zenith Insurance had a solvency ratio of 104%.

A Solvency I ratio of 200% is thought to be roughly equivalent to Solvency II’s SCR. Gibraltar’s financial regulator, the Financial Services Commission, wanted Gibraltar insurance companies to have a Solvency I ratio of 200% by the time the new regime came into force on 1 January 2016.