Deloitte survey reveals significant drop in companies planning restructure

Solvency II

More than one-third of insurers plan to re-price their products in response to the introduction of Solvency II regulations.

That is according to a survey by Deloitte, which reveals that there has been a big drop in the number of insurers planning to restructure their business, with less than one quarter saying they will reorganise their business - down from 47% last year.

The annual Deloitte Solvency II survey, which was conducted by the Economist Intelligence Unit, also found that life companies were more likely to change their product mix, with 26% saying they would do so compared to 8% for non-life companies.

Deloitte lead Solvency II partner Rick Lester said: “This year’s survey has identified interesting developments in insurers’ approaches to Solvency II and many have reviewed the way it will be implemented. In past surveys insurers have talked of the need to restructure and reorganise their business; now they are analysing the risks they run and reviewing the amount of capital they need to write these risks, and adjusting their pricing and product mix accordingly.

“By adjusting their product mix, insurers are able to optimise the diversification of the different risks in their portfolios. This may lead some companies to consider acquiring books of business while others may withdraw from some parts of the market. We’re also seeing increasing use of reinsurance and hedging mechanisms across the industry to lay off more capital-intensive risks.”